Bengaluru: Flipkart-owned fashion retailer Myntra plans to invest in and forge strategic partnerships with at least 15-20 local fashion brands as part of its new accelerator programme and is simultaneously looking to bring more international brands to its marketplace this year, a top company executive said.
Myntra, which launched its Brand Accelerator programme in December last year, has set an ambitious target of generating a valuation of about $500 million-$1 billion from these private brands over the next three years. Last year Myntra bought a majority stake in HRX, a clothing and shoes brand launched by actor Hrithik Roshan, from Exceed Entertainment.
“One of the big bets we are making is with the Brand Accelerator. We are getting into strategic partnerships with at least 15-20 (local) brands—many of these export houses do great quality manufacturing. What we have is the distribution, which is 18 million customers. So, what we are saying is, ‘Why don’t we come together in a partnership?’ And we are going to invest through our platform in 15 big brands in our country and together we will try to get to a point where in 3 years Myntra has helped create an ecosystem of local brands,” Ananya Tripathi, strategy head at Myntra, said in an interview.
“In about three years, we are expecting about $500 million to $1 billion of valuation to come from just these domestic brands,” she added.
The Brand Accelerator programme aims to help small, local sellers who currently lack visibility and exposure to consumers.
Myntra is also exploring licensing partnerships to bring more top international brands onto its platform this year, while also launching a few more private brands. The online fashion retailer, which completed 10 years of operations earlier in February, currently boasts of private labels such as Roadster, Dressberry and Anouk.
“We want to grow our international brands’ portfolio, grow the share of top brands on the platform—that’s what our theme was on selection. Are there brands which we could acquire, get into licensing arrangements with? We are also open to having an omni-channel presence because for big brands offline is also an important channel for visibility,” Tripathi said.
“You may see us launching a couple of private labels this year, but not more,” she added.
Earlier in February, Mint reported that Myntra recorded sales of over Rs850 crore during January, including gross sales from its unit Jabong, cementing its position as the market leader in the online fashion segment. Myntra’s January numbers received a fillip from its heavily advertised ‘End of Reason’ sale, which is held in January and July. Those two months also see clearance sales at offline retailers.
“Our fundamental belief is that over the next few years, there will be at least 5 big domestic brands which will be online first (like our private brand Roadster),” said Tripathi, adding, “in three months (since launching Brand Accelerator), we’ve got all the leading manufacturing and export houses, all the leading Bollywood and sports celebrities and all the leading brand promoters who have reached out to us.”
With the Jabong acquisition, Myntra currently has control over most of India’s online fashion market. In December, Myntra CEO Ananth Narayanan had said that the fashion retailer would aim to hit $2 billion in annual revenue run rate and also turn profitable during 2017-18, driven mainly by a rapidly growing user base. A $2 billion annual revenue run rate implies monthly sales of roughly $165 million.
This year, Myntra is also looking to increase the stable of bigger brands under its umbrella and may even adopt an acquisition strategy to bring those brands on board.
“On the M&A and inorganic side, we are looking at brands that have created something in niche areas...we are looking at those kinds of deals because it essentially crunches our time to market,” said Tripathi.
“This year on the engagement side, we are actively looking out for technology firms globally or in India who are solving fashion problems. And we are very clear about the kind of problems—for instance, personalization, artificial intelligence, etc. That is one big focus area,” she added.