Myntra reduces discounts, targets $1bn GMV by FY 2017

|January 29, 2016 0

BANGALORE, INDIA: Online fashion portal, Myntra has clocked $800 million in annualized Gross merchandise volume(GMV) in January 2016. It has also recorded a growth of 70 percent YoY in 2015.

Sales volumes for the month were propelled by the growth its in-house brands as well as other domestic and international brands, a high growth in womenswear category and sales spike during discount sales.

By the end of December 2015, there were over 2,000 brands on the Myntra platform, of which 800 new brands had been on-boarded in 2015. Myntra’s in-house brands saw an increase in contribution in overall revenue to 20 percent in 2015. Myntra aims to increase the contribution to more than 25 percent in FY2016.

Three key strategies helped the company to grow. First, there was a focus on brand mix that appealed to the price conscious as well as the fashion and brand conscious. Second, the company worked towards greater efficiency to match the increasing scale and better management of business processes. Finally, better cost management through a series of rationalization measures have ensured better bang for the buck, be it in marketing or infrastructure.

However, the more interesting fact is that the e-tailer has recorded 6 percent drop in the discounts and 5 percent drop in the supply chain cost in the last quarter. Heavy discounting measures have already burned deep holes in all the e-tailers pockets and there is no other way to control the piling up losses, other than curbing the discounts further. Going forward, the company has plans to reduce the discounts further by 3-4 percent, said Ananth Narayanan, CEO, Myntra.

“Our focus for the year will be to attain positive gross profit while maintaining scale during the year. We plan to build on the momentum in the first month to touch $1 billion GMV by FY2016-17,” said he.

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