The second-largest fashion e-tailer in India started charging a convenience fee of Rs 10 on every order placed on the platform which is over Rs 1,000. Given its daily order volumes, this cost will amount to a sizable corpus as the company looks to put itself on a path to profitability. The platform already charges a fee of Rs 99 for orders that are less than Rs 1,000.
The fee is in addition to all other fees because it is assessed even to members of Myntra’s membership program, Myntra Insider. The daily order volume for Myntra is estimated by analysts to be five lakh.
Myntra stated that the fee is being charged for the services it has provided, including technical expertise, brand aggregation, and post-sales support, in a pop-up message on the website.
The fee is significant because experts believe that Myntra’s average order value (AOV) is close to Rs 1,400.
The convenience fee is just another step used by companies like Myntra to increase the profitability of their orders, and analysts say that it will not deter customers from making purchases.
“The convenience fee of Rs 10 is not going to pinch customers because Myntra has a huge base of loyal customers and its market share is large enough, which allows the company to take these steps. It’s not a drastic step, and most buyers will ignore it,” said Satish Meena, an independent e-commerce analyst who earlier worked with Forrester. Sources said that Myntra has 50 million monthly active users (MAU).
About two years ago, the company began charging customers a convenience fee of Rs 99 on orders below Rs 1,000. Now, there is a new Rs 10 fee. Regular users still have to pay Rs 99 for low-value orders, while Myntra Insiders just have to pay Rs 10 as a convenience fee, according to sources with knowledge of the situation who spoke to Moneycontrol.
The fashion e-tailer has taken a several laws, including the new fee and efforts to curb returns.
The Scourge Of Returns
According to reports, Myntra started warning customers earlier this year if their return volumes were higher than usual. If they went beyond the threshold, the company would start penalizing them by either charging a significantly higher fee of Rs 149 or even going as far as suspending their accounts.
The company is now collaborating with brands to give customers a coupon at checkout to effort to discourage customers from returning products. The goods are “non-returnable” but the customer receives an upfront discount thanks to the coupon.
Under Myntra’s open-ended exchange policy, it can still be exchanged for any item on the site. According to a source in the know, by doing this, the company can avoid fees related to credit card or bank transfers and also help weed out non-profitable customers.
