Flipkart-owned Myntra Designs which runs online fashion retailer Myntra witnessed an 80% drop in revenue for the year ended March 2018 as it clocked in a revenue of $60.6 Mn (INR 427 Cr).
Myntra’s losses for the year stood at $21.4 Mn (INR 151 Cr) while its total expenses were recorded at $131.5 Mn (INR 926 Cr), according to Tofler analysis reviewed by ET.
Recent reports showed that Myntra’s top seller, Vector E-commerce, had also recorded a recorded a 90% fall in revenue to $11.5 Mn (INR 81 Cr) for the year ended in March 2018 from $173.1 Mn (INR 1,216 Cr) in 2017.
“These data points are partial and doesn’t give the entire picture of the company. Myntra and Jabong continue to grow at a healthy rate with a firm focus on delivering the best of fashion and lifestyle for our customers. We are moving forward in our strategic direction as per plan and remain committed to adding value to our customers and brand partners by transforming fashion eCommerce in the country,” Myntra spokesperson said.
The company is currently looking to expand its operations in the international market and it has begun selling its Deepika Padukone-backed private brand named All About You at Walmart stores in Canada.
The company had spent 2018 developing its private labels, which are reportedly responsible for generating 25% of its revenue. Apart from its existing 14 private brands including Roadster, Dressberry, Anouk, Hrithik Roshan’s HRX, the company had recently launched its new in-house plus size apparel brand named Sztori and ethnic wear brand ‘House of Pataudi’ in partnership with Bollywood actor Saif Ali Khan.
Further, it is also planning to launch nearly 100 offline stores in the next two years for Roadster and HRX.
In November 2018, Myntra and Jabong had completely integrated all of their functions including technology, marketing, category, revenue, finance, and creative teams.
Following the exit of both the Flipkart founders Sachin Bansal and Binny Bansal, the parent company itself has been facing troubles. According to reports, Flipkart India, the company’s B2B arm, had recorded a total loss of $293.05 Mn (INR 2,063.8 Cr) in FY18, which is a 700% increase as compared to $34.79 Mn (INR 245.04 Cr) in FY17.
However, Myntra and Flipkart will soon have to deal with new challenges as the ecommerce FDI policy is set to come into effect from February 1, which may affect the exclusive private labels started by them.
According to the new policy, the ecommerce companies will not be allowed to sell products on its platform in which it owns a stake. Further, only about 49% of FDI may be allowed in inventory-based ecommerce companies.
In a bid to ensure level playing field among the online and offline players, the rules also forbid ecommerce players to offer deep discounts through their in-house companies listed as sellers.
These new rules are expected to affect the global players such as Amazon and Flipkart majorly as both operate as online marketplaces partnering with large online vendors such as Cloud Retail, Appario and WS Retail.
[The development was reported by ET]