It definitely looks like Myntra’s goal to reach profitability by 2018 is going to be possible. The fashion etailer has done reasonable sales in January, helped in part by the bi-annual End of Reason sale (EORS). Myntra and Jabong have notched together an impressive Rs 850 crore sales.
Both companies together sold goods worth a combined Rs. 450 crores during the EORS. Insiders stated under anonymity that Myntra has an annual revenue of $ 1.6 billion.
Ananth Narayanan’s plans for Myntra & Jabong
Ananth Narayanan, CEO of both companies is optimistic about the companies’ performance and growth. He had said that the EORS had done sales Rs. 8 crores more than expected. He also said that they would continue to focus on acquisitions.
Recently, Myntra had added three sellers to reduce Vector (its single largest seller) ecommerce’s share. Narayanan said that private brands would be the focus. He said,
“We are also focusing on our Myntra Brand Accelerator programme where we are trying to incubate more brands—we are trying to see whether we can bring more designers and brands into Myntra which will obviously be at a higher margin, but will be exclusive to us.”
He is quite confident about turning profitable soon, due to the shrinking burn rate,
“Our burn rate is already down from what it was—I expect we will continue to reduce burn rates as we go towards EBIDTA – zero, where we’re not burning money, but generating cash.”
One of the steps is to bring down the companies’ supply chain costs. Narayanan said,
“We will push Myntra fashion brands, which is more at Jabong but also at Myntra—which is also a big margin driver for us. We will also use artificial intelligence and technology to continue to personalize the platform for all customers.”
Increasing sales, falling expenses, beating expected sales figures – all these are good signs that a company is doing well. 2017 will be a crucial year for Myntra – Jabong. We will be keeping a close watch to see if they are able to hit EBIDTA zero.