Following Flipkart’s move to reduce its dependence on WS Retail, its subsidiary Myntra is also taking similar steps. The company has included three new third party sellers to the existing Vector E-commerce to comply with the FDI laws. According to a filing with the Registrar of Companies (RoC) Myntra has added Shreyash Retail, Health and Happiness and Tech Connect Retail as its sellers.
About time too, as Vector has posted a 40% increase in its revenue for the year 2016. However, like its compatriots, Vector has also notched up a loss of Rs 8.7 crore. The company attributes its loss to heavy discounting and increase in its inventories. In a statement, it said,
“With a view to enhance its margins and profitability, the company (Vector) is actively engaged in tying up with emerging brands which yield better margins in the retail segment when compared to established brands.”
Things will get better for Myntra this year
“During that period (FY16) competition got tougher. Players such as Amazon and Flipkart also got very aggressive on the fashion category. Also brands had started reacting to heavy discounting, which forced them to discount from their pocket. This year should be better for them (sellers) since Myntra is now available across all channels.”
Working towards profitability
Myntra recently moved in with Jabong to cut expenses on office space. The two companies also clubbed their incomes (after the merger) to attain a greater figure. Perhaps all this is to take it closer to its dream of profitability, which it aims to reach by 2018.
The company’s recent measures coupled with Sahni’s assurance leads us to think that profitability in 2018 might just be possible for Myntra.