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Business News/ Industry / Retail/  After merger, Myntra steps up sales growth
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After merger, Myntra steps up sales growth

Myntra has a target of generating $1 billion in gross merchandise value by 2016

Myntra was bought by India’s largest e-commerce firm Flipkart in May for an estimated $330 million in a deal that significantly increased Myntra’s spending power. Photo: BloombergPremium
Myntra was bought by India’s largest e-commerce firm Flipkart in May for an estimated $330 million in a deal that significantly increased Myntra’s spending power. Photo: Bloomberg

Bangalore: After its takeover by Flipkart, online fashion retailer Myntra is accelerating its sales growth by widening its product offerings, increasing warehousing capacity by four times and spending more on marketing.

Myntra was bought by India’s largest e-commerce firm Flipkart in May for an estimated $330 million in a deal that significantly increased Myntra’s spending power.

“We’ve seen a big jump in customer acquisition (number of new customers) over the past six weeks," chief operating officer Ganesh Subramanian said in an interview. “This is because we increased our selection by 30-40%, particularly in women’s wear, and we have been marketing heavily across mediums."

Sales growth has also been boosted by increased discounts as Myntra, flush with funds after its $50 million equity infusion in January and with access to Flipkart’s large cash war chest, has been regularly offering price-offs of as much as 30-40%, compared with earlier levels of 25-35%.

Myntra’s daily orders have risen by at least 50-60% over the past four weeks on a sequential basis, a person familiar with the matter said, speaking on condition of anonymity.

Myntra has a target of generating $1 billion in gross merchandise value—value of goods sold on its site—by 2016. It gets to keep a cut of that. Myntra reported net sales of over 212 crore for the year ended 31 March 2013.

The online retailer is looking to increase its warehouse capacity by four times to 500,000 sq. ft this year to help achieve that goal, Subramanian said. The company will replace its three warehouses with two new, larger ones in Delhi and Bangalore by the end of the year, he said.

Myntra faces tough competition from specialty online fashion retailer Jabong and the likes of Snapdeal and Amazon, and the company is trying to differentiate itself from rivals by marketing itself as a fashion brand rather than only touting discounts.

As part of the merger, Myntra chief executive Mukesh Bansal was nominated as the head of both Myntra as well as the fashion business at Flipkart.

“The strategy is clear: Myntra will be the fashion destination while Flipkart will offer the wide range of products that is expected from a horizontal player. One of the main ways to do it is by building our private brands business and providing value added services such as fashion content. We have seven private labels and this year itself we will be adding at least three more," Subramanian said.

To build expertise in fashion, Myntra is increasingly hiring from institutes such as the National Institute of Fashion Technology and people who have experience selling apparel brands as well as writing fashion-related content.

“We’re clear about becoming a high-value fashion player, so we’re focusing on hiring more ‘creative’ talent. This year, we’re hiring a lot of designers, fashion content writers from magazines—basically people with deep expertise in fashion," human resources head Pooja Gupta said.

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Published: 01 Jul 2014, 11:32 PM IST
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