Myntra Top Seller Vector E-Commerce Goes In The Red; Revenue Drops 90%

Myntra Top Seller Vector E-Commerce Goes In The Red; Revenue Drops 90%

SUMMARY

Vector E-Commerce has recorded a loss of $73.9K

Company reported a negative net worth of $883K

At one point one Vector would supply 80% of Myntra’s orders

Vector E-commerce, an online seller that used to supply most of the products sold by Flipkart-owned fashion ecommerce portal Myntra, has 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.

According to reports, the online vendor has recorded a loss of $73.9K (INR 52 Lakh) in FY18 compared to a profit of $1.2 Mn (INR 9 Cr) last year.

The seller’s financial statements reportedly stated that Vector had a negative net worth of $883K (INR 6.21 Cr), as its liabilities in the year exceeded the net worth of its assets and equity. It also showed a working capital deficit of $2.2 Mn (INR 16 Cr) as of March 2018.

At its peak, Vector E-commerce used to account for 80% of the sales on Myntra.

The company had reported a drop in its revenue in February when sales fell by 30% drop in FY17 compared to the year before. The Bengaluru-based online seller, which was founded in 2010, had grown to become Myntra’s largest online vendor much like Amazon’s Cloudtail and Flipkart’s WS Retail.

Vector’s Declining Business

Vector E-Commerce’s slide into losses began in 2016 after the Department of Industrial Policy and Promotion (DIPP) released guidelines to ecommerce players which directed that one vendor or a particular group of companies will not be allowed to drive over 25% of the total sales of the ecommerce company.

Myntra and Vector, which had worked closely till then — one of Vector’s owners, Prabhakar Sunder, was also the chief financial officer at Myntra — had to dilute the partnership.

In February 2016, Myntra started working with a new seller called Tech Connect Retail.

The directive further added that the ecommerce entity that is offering products to the marketplace will not directly or indirectly influence the sale price of goods or services.

The guideline has affected large online sellers working with Flipkart and Amazon as well.

In August, Flipkart’ s major retailer WS Retail reported that it’s revenue declined by 67% to $670.91Mn (INR 4,600 Cr) in FY17 from $2.02 Bn (INR 13,900 Cr) in FY16, causing it to stop working with Flipkart.

Meanwhile, Amazon’s biggest vendor Cloudtail fared slightly better, with a reported 27% growth in its revenue for FY18 from FY17. However, this was well below the explosive 300% growth the company registered in FY16.

[The development was reported by ET]

You have reached your limit of free stories
Become An Inc42 Plus Member

Become a Startup Insider in 2024 with Inc42 Plus. Join our exclusive community of 10,000+ founders, investors & operators and stay ahead in India’s startup & business economy.

2 YEAR PLAN
₹19999
₹7999
₹333/Month
Unlock 60% OFF
Cancel Anytime
1 YEAR PLAN
₹9999
₹4999
₹416/Month
Unlock 50% OFF
Cancel Anytime
Already A Member?
Discover Startups & Business Models

Unleash your potential by exploring unlimited articles, trackers, and playbooks. Identify the hottest startup deals, supercharge your innovation projects, and stay updated with expert curation.

Myntra Top Seller Vector E-Commerce Goes In The Red; Revenue Drops 90%-Inc42 Media
How-To’s on Starting & Scaling Up

Empower yourself with comprehensive playbooks, expert analysis, and invaluable insights. Learn to validate ideas, acquire customers, secure funding, and navigate the journey to startup success.

Myntra Top Seller Vector E-Commerce Goes In The Red; Revenue Drops 90%-Inc42 Media
Identify Trends & New Markets

Access 75+ in-depth reports on frontier industries. Gain exclusive market intelligence, understand market landscapes, and decode emerging trends to make informed decisions.

Myntra Top Seller Vector E-Commerce Goes In The Red; Revenue Drops 90%-Inc42 Media
Track & Decode the Investment Landscape

Stay ahead with startup and funding trackers. Analyse investment strategies, profile successful investors, and keep track of upcoming funds, accelerators, and more.

Myntra Top Seller Vector E-Commerce Goes In The Red; Revenue Drops 90%-Inc42 Media
Myntra Top Seller Vector E-Commerce Goes In The Red; Revenue Drops 90%-Inc42 Media
You’re in Good company