Myntra aims to turn profitable by 2017-18
Myntra CEO Ananth Narayanan says the Jabong acquisition has boosted the online fashion retailer’s numbers
Bengaluru: Flipkart-owned online fashion retailer Myntra, which acquired smaller rival Jabong earlier this year, aims to hit $2 billion in revenue run rate and also turn profitable by the end of the 2017-18 fiscal year, driven mainly by a rapidly growing user base.
Myntra chief executive Ananth Narayanan on Thursday said Myntra’s acquisition of Jabong had also boosted the company’s numbers, adding that it wants to turn Ebitda-positive in the next financial year. Ebitda is short for earnings before interest, tax, depreciation and amortisation, an indicator of operating profitability.
ALSO READ | Myntra plans offline push for private brands
“This year, if I put it in a historical context, has been the best year Myntra has ever had —we grew roughly 80% year-on-year. We hit $1-billion run rate during the year, in terms of annualized run rate...and that’s primarily because our monthly active user base grew. And that wasn’t during a sale month—but on an ongoing basis,” said Narayanan.
Narayanan, who expects Myntra to post 100% revenue growth next year, said the company wants to improve its net promoter score (NPS)—a leading indicator of customer satisfaction—to about 60% by the end of the next financial year, from the current levels of about 50%.
Myntra, which was acquired by Flipkart in 2014, is planning to use smart technology such as artificial intelligence to enhance consumer experience and use customer data to create personalised stores.
The fashion retailer will curate clothing lines based on fashion trends and also launch a mobile app-based chat support service for customers next week to enable users and the brands listed on the portal to interact.
“October was a historical month for Jabong as well because we became unit-economics positive for the first time...Myntra and Jabong put together will be $1 billion (in revenue) by the end of year…. Our overall monthly user base is about 18 million between Myntra and Jabong—13 (million) and 5 (million),” said Narayanan.
“The unit economics continue to improve—we are at about 4-5% in terms of unit-economics positive,” he added.
Myntra plans to open a new offline store for one of its private labels, Roadster, before the end of the year, even as it looks to further expand its current roster of private labels during the upcoming festive season, Mint had reported in October.
Myntra currently has private labels such as Roadster, HRX, Dressberry and Anouk.
To differentiate itself from Amazon, Flipkart and others, Myntra is trying to project itself as a marketplace for “mass premium brands”. The company is carefully curating products from popular brands rather than simply offering the widest range possible, increasing its selection of women’s products, adding to its collection of private labels, and introducing fashion content to keep customers hooked.
Earlier this year, Myntra bought rival Jabong for $70 million to create India’s largest online fashion retailer. Myntra, Jabong and Flipkart together account for 70% of the online fashion market in India.
In the 2014-15 financial year, Myntra Designs Pvt Ltd posted revenue of Rs773 crore with losses of about Rs. 740 crore, according to documents posted with the Registrar of Companies.