“Myntra will be the first to get to profitability. Early 2016, we will be profitable for sure,” said Mukesh Bansal, CEO of Myntra and head of commerce at Flipkart. “Growth and scale help us to achieve better economies. In addition, we have been able to build a very strong portfolio of in-house fashion brands that give us better margins … We expect to close this financial year with 300% growth year-on-year.”
How did the Flipkart-Myntra merger help?
2014 saw the merger of the two homegrown ecommerce giants which apparently has contributed to the scaling up of Myntra’s operations. Mukesh Bansal has been concentrating on generating profits for almost two years now. He even stated that he would always choose sustenance over sales-at-any-cost any day.
The merger has helped both the entities to capitalize on each other’s relationships with brands, technical expertise and operational activities. They were also able to leverage on the exploding popularity of fashion and apparel to strengthen their foothold in the online fashion domain.
In general, apparel has caught on with the fashion-conscious Indian customers due to the following:
- Options in all price ranges
- Easy and free return policies
- Prompt customer service
- Innovative visualizing techniques
- Customer reviews
- Discounts and promotions
Profitability through focus on private labels
Ecommerce players like Myntra, and even Jabong, are concentrating more on private labels now with celebrity endorsements and tie-ups as they bring in 60-65% margins compared to 30-40% margins from brands.
“Some of the brands like Roadster, Dressberry and Mast & Harbour have grown significantly and are already category leaders on Myntra.com. Leveraging this opportunity, we are now building them as standalone brands that can grow beyond the Myntra platform,” said Abhishek Verma, head – Myntra Fashion Brands.
Myntra gets 25% of its revenue from its in-house brands, so it’s no wonder that the focus would be on these when it’s inching closer to profitability. If it really will be the first to achieve profitability will be interesting to see, don’t you think?