For those who were wondering if the e-commerce business is profitable or not, there’s some good and important news.
Myntra has decided to slow down on the predatory discount pricing and instead focus on profitability post- Diwali. The best way to do that was to promote their in-house fashion brands, as these brought in exponentially higher profits than selling external fashion labels. Myntra was recently acquired by Flipkart, which could probably be the reason towards this new motivation to make profits quickly.
Not so similar
This is an interesting contrast to what Business Today had revealed about Flipkart’s attitude towards profitability. Apparently, when interviewing the Chief Financial Officer of an IT company as part of their hiring process for a CFO, the Flipkart founders did not place ‘profitability’ high in their list of priorities. According to a spokesperson for Flipkart, the company wished to continue investing in its operations to become India’s biggest retailer- even at the cost of making profits. Flipkart is also investing heavily in customer acquisition, by aggressive marketing and improving brand visibility.
On the other hand, Myntra planned to cash in on some profits by reducing marketing expenses. In any case, now that Myntra has been taken over by Flipkart- the profit policy of one will definitely affect the other. With the way Myntra and Flipkart are developing their approach towards profits- it seems like they can have the best of both worlds. After all, opposites attract!