Home / Knowledge / News / Fashion / 'Myntra's profitability in sight'
'Myntra's profitability in sight'
22
Feb '16
Despite skepticism about profitability of e-commerce, Myntra has built a viable business with a clear line of sight to profitability, according to Myntra's Chief Technology Officer and Chief Product Officer Shamik Das Sharma.

Sharma's comments came at IIFL's Enterprising India VII – Global Investors' Conference in Mumbai. He said that the profitability model is based on very rapid revenue growth, which in turn is being driven by rising consumer adoption of online purchasing and fashion/apparels being a very large and fast growing segment of e-commerce.

He also said Myntra's strong positioning as a differentiated fashion retailer is a boost to the business model and it aims to become significantly profitable within five years on the back of falling operating costs.

Sharma said that food and apparels respectively, were the largest part of the retail market. Within the rapidly growing online space, while consumer electronics was more than one-third, apparels and accessories were also becoming significant, growing at 80 per cent YoY, and carried higher margins. He sees Myntra increasing its share of the online branded retail space, which can be more than $10 bn, and becoming profitable within five years.
 
He explained that the average discount in fashion e-commerce runs above 35 per cent but is partly to do with unanticipated changes in fashion trends, which results in unsold inventory, which then has to be discounted and sold. This can be addressed by improving prediction algorithms and time to market. Further, by better integration with suppliers' production cycles, timing mismatches can be reduced, which would be crucial in cutting down costs. Moreover, increasing revenue size means that it has better negotiating ability with major brands, including international apparel names, on exclusivity period, which will help improve margins.
 
Myntra has also been a pioneer in creating its own brands - Roadster, HRX, Wrogn are three such brands and are endorsed by celebrities. These carry higher margins, though they also come with higher inventory risk. However, Myntra has rapidly grown this segment and some of its brands are now beating major established brands. These brands area also aligned with Myntra's overall positioning as a youth-oriented upmarket fashion retailer. Myntra is also using social networking influences to better establish brand connect. For instance, users wearing trendy dresses upload their own photographs, which then influence other buyers.
 
Sharma also said that unit economics did not favour the web interface at their current scale, though as scale improves, Myntra may later reconsider its mobile only strategy. (SH) 

Fibre2fashion News Desk - India

Must ReadView All

Apparel/Garments | On 28th May 2017

Over 45% US retailers to use AI in next 3 years: Report

Over 45 per cent retailers in the US plan to utilise artificial...

Neelesh Hundekari speaking at the event. Courtesy: Subir Ghosh

Textiles | On 27th May 2017

Fabric of Change initiative announces €250000 scaling fund

The Fabric of Change initiative of Ashoka and the C&A Foundation is...

Apparel/Garments | On 28th May 2017

Naked Brand, Bendon sign agreement to reorganise

Naked Brand Group, a fashion and lifestyle brand, and Bendon Limited, ...

Interviews View All

Asim Dalal
Indo Count Retail Ventures

Today, there is no other emerging market as India, "we make in India and...

Rahul Bhadani
Looksgud

Navigating through catalogues is a bit hasslesome

Deepak Jain
Baggout

We are using Facebook and Instagram to promote ourselves

Lynda Kelly
Suominen Corporation

Suominen Corporation is a manufacturer of nonwovens as roll goods for...

Marcel Alberts
Eurofibers

Coating at a fibre level is a practice not usually seen in the...

Marten Alkhagen
Swerea IVF AB

Marten Alkhagen, Senior Scientist - Nonwoven and Technical Textiles of...

Tony Ward
Tony Ward

"You have to truly understand what your client wants, know her needs, what ...

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

Sanjukta Dutta
Sanjukta's Studio

<b>Sanjukta Dutta</b> creates unique garments by clubbing prints of...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

news category


Related Categories:
May 2017

May 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search