Yes, you read it right – in the FY 2014-2015, Jabong’s financial report was better than rival Myntra!
Based on the regulatory filings for the year ended March 2015, Myntra’s revenue increased by 70% to Rs 746 crore, whereas Jabong’s revenue grew twofold to Rs 1,083 crore.
And the Flipkart-owned company burned more cash compared to the GFG-owned fashion portal.
Myntra’s expenses doubled in FY 2015 as wages & salaries expenditure increased along with ad spends and inventory cost. The fashion etailer’s wage bill multiplied by 5X, and employees’ expenses by 30X.
It hardly comes as a surprise since the fashion etailer goes on a splurge spree every time the parent company Flipkart pumps in funds.
Instead of Xerion Retail Private Limited that runs Jabong, the fashion etailer’s major expenses are paid by its in-house vendor Jade eServices. So while Myntra’s spends are reflected in the financial report of the company (Myntra Designs Pvt. Ltd), Jabong’s key spends doesn’t get reflected in Xerion’s FY report.
Taking that into account, Myntra’s main seller Vector Ecommerce earned more revenue compared to Jabong’s chief vendor Jade eServices. In FY 2015, Jade was neck-deep in loss, on the other hand Vector clocked up profit.
From FY 2015, 2016 and now 2017, both the fashion etailers have gone through some drastic changes. Jabong is being tossed around from one buyer to another with Snapdeal in the lead. And Myntra has come full circle after the app-only phase only to re-launch its desktop site in May this year.
Both the companies realigned their strategies to become more profitable. Will it reflect in the FY 2016 financial report, which may be released by the end of this year? It is quite possible that by the time it comes out, the Snapdeal-Jabong merger may have happened. That surely will shake up India’s online fashion industry and marketplace leadership board.
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