New Delhi: Online fashion retailer Yepme.com, run by VAS Data Services, posted 73% higher losses in 2015-16 as the company spent more on discount and advertisement to raise sales by 29% to touch Rs107 crore.
According to the company’s filing with Registrar of Companies (RoC), it spent more than Rs20 crore in discounts, a 754% jump from a year ago, while advertising and promotional expenses grew 51% to Rs115 crore.
Yepme is a private label brand, which typically fetches 30-40% higher gross margins than other online marketplaces that depend on branded apparels.
The Gurgaon-based company was started by Vivek Gaur and Sandeep Sharma in 2011. It sells private labels under the brand name Yepme in ethnic Indian wear and western wear for men and women. Filings show that footwear contributed 50% of the total turnover in fiscal 2015-16, followed by 34% contribution of accessories and 16% of apparels and garment.
An email sent to the company on 6 January went unanswered.
To increase its presence, Yepme has also ventured into offline expansion in January 2016—it opened its first physical store in Gurgaon. Going the franchise route, the company is targeting 1400 stores in next three years, Mint reported in September 2016. According to its website, Yepme currently has 21 stores across cities like Bengaluru, Delhi, Agra, Gwalior, Noida, Meerut and Gurgaon, among others.
The filing also showed that Yepme expanded to London through a subsidiary, Yepme UK Ltd that was incorporated in January 2016, but began operations in April 2016. Since 2014, Yepme has been selling in the US through Yepmeworld.com.
Backed by investors including Helion Venture Partners,Pacific Sequoia Holdings, Capricorn Investment Group, Ramunia Investments, TCS Global, Morpheus Media Fund, among others, the company raised over Rs270 crore in FY2015-16, as per the latest filings made in September 2015.
Yepme, which also sells through marketplaces such as Jabong, Snapdeal, Amazon, faces stiff competition from their own private labels.
Also, the two arch rivals in e-commerce, home-grown Flipkart and US-based Amazon are increasingly spending large sums of money to acquire customers.
Amazon India, on the other hand, spent heavily on marketing and discounts in FY2015-16. Its losses soared to Rs3,572 crore from Rs1,724 crore, Mint reported in December 2016.
Mint reported on 2 January that Flipkart including its fashion subsidiaries Myntra and Jabong had halved its monthly burn rate to roughly about $40 million—still a large spend to compete against for a relatively less funded online fashion companies,including Yepme, Limeroad, Koovs, FabAlley.