Middle of April, Myntra surprised the Indian online world when it acquired Witworks, a tiny Bengaluru startup that makes smartwatches. The buyout marks the beginning of an aggressive play Myntra has planned in India’s wearables market that has more than trebled in two years.
Top executives at the company, India’s No. 1 fashion e-commerce company, plan to go all in to break into the wearables market that is dominated by global tech giants and even launch a software platform on the lines of Google Fit or Apple’s HealthKit to create apps.
In planning is the launch of a smart band Blink Go, a top-of-the-market smartwatch, and a range of sports-centred devices like a connected earphone.
“We’re nothing, if not ambitious,” says Myntra’s chief technology officer Jeyandran Venugopal, ex of Yahoo and Amazon in engineering roles. “As the largest fashion and lifestyle player in India, we can not only create the market but also enable people who want to address that market to reach them.”
Blink Go, priced under Rs 10,000 with features such as a heart rate monitor, sleep tracker, colour display and swappable bands, will be the company’s first product in the wearables market. Venugopal says it will have the “best features in the category”.
Engineers at Witworks are racing against time to launch the device sometime towards the end of June or early July to coincide with the company’s bi-annual ‘End of Reason’ sale. “Can’t share the (exact) price now but it will be extremely competitive,” says the Myntra CTO.
Myntra’s focus on the category comes from the conviction that young buyers of fashion goods are looking to spend more on wearable devices. There’s data to prove it. According to RedSeer Consulting, fitness wearable industry in India grew at a CAGR of 75-100% in the last two years: selling more than two million units worth Rs 400 crore to Rs 500 crore.
“We were seeing early traction – Blink watches were one of the fastest selling in that category on our platform,” says Venugopal. The Blink Watch was the first smartwatch made by Witworks and it was sold on various e-commerce websites including Flipkart and Amazon. Blink Go is a smart band and not a full-fledged smartwatch.
This mirrors a global trend. About 132 million wearables – smartwatches, wristbands, earphones and clothing – are expected to be sold in 2018. By 2022, market research firm IDC expects wearable shipments to grow to nearly 220 million units.
Myntra’s plan to create a dedicated software platform for its wearable range means that the vision is that at some point, devices sold by the company will have third-party apps. “We want to create a Myntra wearables platform – an open ecosystem where we will produce a line of products that work with each other and bring all of this information together to create a health and fitness picture,” says Venugopal.
The company has tied up with chipmakers and contract manufacturers to create its bands. “This year we will take a bet on sports as a vertical. A lot of the wearables play will be aligned with sports as a category,” he says. A connected shoe or a shoe insert (sole), and clothes with conductive fabric are also in the pipeline.
The idea is to create clothing like the latest Levi’s Trucker jacket that has integrated Jacquard by Google. The Jacquard Thread, which has embedded electronics in it, was created at Google’s Advanced Technology and Projects group. The thread can be woven using traditional methods but it can pass on gestures and even provide haptic feedback.
“It’s still very early days. Our first devices are not yet in the market,” cautions Venugopal.
The Myntra Wearables Platform will be based on Marvin OS, an Android fork that was created by Witworks for its Blink smartwatch. While Android Wear and Apple Healthkit are open to developers, not all companies can afford to build their wearables on these platforms because of licensing costs and development effort.
Myntra wants to bring other manufacturers, especially startups, on to the platform. “Every new device needs close interaction with Google. It becomes difficult for a startup or a small device manufacturer to experiment,” says Venugopal. Not everyone has the ability to invest in their own real-time operating system or connect with the partner ecosystem.
Selling apparel online is one thing. But making hardware and integrating software that works across devices is quite the other. At least one expert pans Myntra’s wearables strategy. “I call it e-commerce greed. You find yourself successful in one space, you start imagining you can dominate every space. These are temptations best not taken,” says brand consultant Harish Bijoor.
When Myntra pushes its wearables out, it will have to compete with best-in-class devices makers such as Fitbit and Garmin. “Technology is a different competence. Fashion is a different competence. Wearables is a different competence altogether,” says Bijoor. The growth of specialist brands such as Jaybird (headphones for runners) or Garmin’s smartwatches for athletes signals that specialist brands win in comparison. “That’s when your brand focus is defined,” says Bijoor, a veteran of consumer companies such as Hindustan Unilever and Tata Coffee.
To be sure, building a platform on top of which other developers can build their wearables and apps is not easy. It’s a game usually won by big companies like Google and Apple thanks to their deep reach and a large partner and developer ecosystem. Even large rivals such as Samsung have failed to create their own operating system and ship with Google’s Android.
Just launching wearables may not be enough to win fitness conscious users. “Just an app or just a wearable device doesn’t work in this country. What people really need is services,” says Vishal Gondal, the founder of GOQii, one of the largest sellers of fitness bands in India. Gondal started the company with fitness trackers and a personalised health coach on an app but now has partnered with banks and insurance companies to provide benefits like cheaper insurance premium to users. The company has nearly half a million paying customers.
Still, if Myntra manages to find and convince hardware startups to build on the Myntra Wearables Platform, it might have a shot at winning the market big and even launch services on the platform without having to build everything on its own.
“Creating the platform is the easy part. Actually creating demand in the market is the tough part,” says Nihal Kashinath, Founder & CEO of Applied Singularity, a platform for artificial intelligence and internet of things professionals. “It’s become so commoditised and it’s an overcrowded, fragmented market,” he says. “Also, someone has to build platforms on your platform. That will be the bigger challenge.”
Wearables were at the peak of the hype cycle sometime in 2014. Between 2014 and 2016, hundreds of wearable startups raised nearly $4 billion in capital. Lately, some have closed shop. Notable among them was Doppler Labs, which raised nearly $50 million in funding but had to shutter down last year.
Myntra can take comfort in on thing, though: it launched and scaled some 14 private labels on the platform, a task some fashion experts had dismissed as impossible for an e-commerce company. “There are 411 fast fashion brands sold online and Myntra has swung to the top. It’s certainly in the top three to five brand labels,” Bijoor, the brand specialist, adds.
The company’s private labels (example: Roadster) contribute to 25% of its $1.2 billion GMV (gross merchandise value) sales and are profitable for the company. “In the rat race, even 2% of value is good value,” says Bijoor. India’s fashion market is roughly about $70 billion in size and e-commerce sales make for some $4 billion. The online slice is expected to grow 3.5 times to $14 billion by 2020 – a big enough expansion to take wild bets. Myntra’s parent company Flipkart, India’s largest e-commerce company, is in the middle of a sale to US retailer Walmart in a deal that values the online retailer at over $20 billion.