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Flipkart-owned Myntra hits net sales of $1 bn

August 23, 2016

Sales of products at full price doubled in the seven months to July, helping the fashion portal maintain healthy unit economics

Flipkart-owned Myntra crossed net sales of $1 billion in July, becoming the first online fashion portal in India to achieve the milestone. The company shifted from gross merchandise value (GMV) to tracking net sales, after investors brought in former McKinsey Director Ananth Narayanan as chief executive officer in January.

Myntra said sales of products at full price doubled in the seven months to July, helping maintain healthy unit economics despite showing robust growth. Narayanan said the company's revenues had grown by 70 per cent in the same period. "Consumer behaviour is starting to evolve. Even without Jabong at this stage, we have more than 10 million monthly active users. Full-price sales have become double of what they were before, discounts have dropped by 10 per cent and our repeat customers continue to go up,” said Narayanan.

A MILESTONE

  • CEO Narayanan said the firm's revenues had grown by 70% in the period
  • Myntra had acquired Rocket Internet-backed fashion portal Jabong for $70 million last month
  • The company expects to be wholly profitable by early next year, with its acquisition of rival Jabong last month
  • It says both brands will operate independently and will be positioned differently in order to continue to grow the market

Myntra claims it is cash-positive from a unit-economics perspective, making it the only fashion e-commerce brand to do so on such a scale. Moreover, the firm expects to be wholly profitable by early next year, with its acquisition of rival Jabong last month helping it get there sooner than expected.

Myntra had acquired Rocket Internet-backed fashion portal Jabong for $70 million last month. The company says both brands will operate independently and will be positioned differently in order to continue to grow the market.

By controlling a majority of online fashion sales, Myntra's owner Flipkart is looking fend off an attack from rival Amazon in India's e-commerce space. Fashion is the only segment rival Amazon has not been able to increase market share globally, closing it off from a sector that usually earns higher margins.

"It is not a market where one brand wins, the other loses. Jabong can help us grow. We are getting access to more customers as Jabong has more women on its platform. Jabong has a 60 female to male ratio and it is reverse for Myntra. The second is Jabong — it is stronger in certain areas like the north and, overall, it helps to have more customers,” Narayanan added.

Flipkart recently shifted from tracking GMV to customer satisfaction on its own horizontal e-commerce platform, after rival Amazon began poaching its loyal customers with better customer service.

The company is now looking at fashion, which earns higher margins than electronics, to help turn profitable and make it less reliant on external funding to take on Amazon.
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