Brands are increasingly opting for an online-offline model to engage more with their audiences. Online multi-brand beauty products retailers such as Nykaa, NewU, etc, have already set up offline stores to woo customers. Now, Flipkart fashion subsidiary Myntra is leveraging offline presence to grow its cosmetics business.
The company has been talking about its plans to open 100 offline stores in next two years and the first outlet is speculated to come up in Bengaluru later this year or early next year.
Myntra, which is based in Bengaluru, is scouting for large spaces in malls and high streets across top cities at present.
Ananth Narayanan, chief executive of Myntra-Jabong, said the company will enrol franchisees to run the beauty and cosmetics outlets. Flipkart acquired Jabong through Myntra in a cut-price deal that valued the online fashion store at $70 million in 2016.
A Myntra spokesperson told Inc42: “Beauty and personal care is a fast growing segment for us which has been growing at 400% YoY. Today we have over 250+ leading brands across categories such as Makeup, Skin Care, Bath & Body, Perfumes and Beauty Appliances. We will work with a franchise partner to curate offline stores for the beauty segment.”
In a report, a person familiar with the development said that Myntra Beauty will be modelled on the LVMH-owned global chain Sephora and will have stores with 3,000-4,000 square feet of space.
Further, it is also being speculated that Myntra is looking for mall spaces to open stores for the Hong Kong-based fashion brand Esprit, with which Myntra entered into a franchise agreement last year.
During an investor call after Walmart’s acquisition of Flipkart, Walmart CEO Doug McMillon referred to Myntra as a “piece” of the company that is positioned well to take advantage of India’s growing middle-class and relatively young population.
Myntra: Taking Its Bet On Cosmetics Offline
Inc42 reported earlier that the company has been planning to open offline beauty and wellness stores. It sells more than 100 beauty and cosmetics brands, including MAC, Clinique, Bobbi Brown, and Estee Lauder, on its platform.
Myntra plans to sell these products via a chain of multi-brand physical stores now. The cosmetics store will be the third brick-and-mortar foray by Myntra, but the first carrying the Myntra brand name. Myntra’s other two offline ventures are stores of its private brand Roadster and franchisee outlets of Spain’s Mango fashion brand.
The development comes soon after Myntra’s acquisition of Mumbai-based end-to-end omnichannel platform for retail, Pretr, which it acquired to strengthen its footprint in this segment.
With the acquisition, Myntra planned to forge omnichannel partnerships with brands on its platform and provide a comprehensive solution to retailers to enhance their own omnichannel journey.
Recently, Narayanan said that the sales of Roadster — Myntra’s first offline store — have shot up after the offline expansion. The 100-store expansion plan includes 50 Roadster stores, along with stores for Hrithik Roshan’s fashion brand HRX and Mango, among others.
Earlier, in December 2017, the company had announced the launch of its multi-brand offline stores where customers could see all the private labels that are available on its online platform.
Narayanan had earlier said that Myntra planned to close FY19 with a gross merchandise value (GMV) of $1.9Bn, riding on the back of private labels and offline expansion.
Here’s a look at some of Myntra’s metrics:
- Myntra has reportedly touched an annual run rate of nearly $2 Bn (INR 13,900 Cr), in terms of GMV
- In FY17, Myntra cut its losses by 25% to $96.06 Mn (INR 655 Cr) against $120.7 Mn (INR 823 Cr) in the previous year, as the focus on its private labels continued to drive results
- It posted a turnover of $314.6 Mn (INR 2,000 Cr) in FY17 and also saw 100% growth in its accessories category for FY17. It had plans to achieve a year-on-year growth of 200% in the current fiscal
Cosmetics Industry In India
Myntra Beauty will compete with beauty and cosmetics retailers such as Sephora, Colorbar, Bobbi Brown, Body Shop, L’Oreal, and Nykaa in India’s cosmetics market, estimated at about $6.5 Bn.
Inc42 had reported that online beauty marketplace Nykaa raised $24.45 Mn (INR 165 Cr) in a Series D funding round to fuel its plans to expand its offline presence from 17 stores currently to about 55 stores by FY19-end.
Reports also surfaced that Amazon India was planning to launch its own private label of beauty and personal care products.
Another player looking to enter the cosmetics market is online grocery delivery company BigBasket, which too plans to launch private labels.
Here’s are some facts and figures on the Indian beauty and cosmetics industry:
- According to RedSeer Consulting, the market is growing 25% annually and is expected to touch $20 Bn annual sales by 2025
- A report released in May 2017 said the wellness industry in India is set to cross $7.8 Bn (INR 500 Bn) by the end of this year and is expected to rise by 30% every year subsequently
- The estimated value of the beauty industry in India was $39 Mn (INR 250 Cr) in 2008 and it increased to $71.8 Mn (INR 460 Cr) in 2016
- A report by KPMG said that the industry would have a market value of $12.4 Bn (INR 80K Cr) by 2017-2018 and is expected to grow at a rate of 15% to 20% going forward
Myntra has a plethora of opportunities to cash in on the offline beauty and wellness segment, worth over $35 Bn and choosing its home ground, Bengaluru, to start off the diversification is sure to give it an edge in the game.
[The development was reported by ET.]