Myntra inks deals with women’s wear brands Chemistry, AKS
Bengaluru: Flipkart-owned fashion retailer Myntra said it has formed brand partnerships with two women’s apparel brands—western wear brand Chemistry and ethnic wear brand AKS. As part of its brand accelerator programme, Myntra is aiming at roughly $500 million in gross sales from up to 15 such brands over the next three years.
The companies declined to disclose the value of the deals but Myntra said it will pick up equity in these brands based on their sales performance over the next few years.
Myntra, which also owns the fashion site Jabong, expects to sign five more such partnerships within the next month, chief executive Ananth Narayanan said in an interview. In all, the company plans to invest in 15 brands in sportswear, men’s casual wear and women’s wear, he said. Myntra selects these brands based on their design aesthetics and the talent of the team behind the labels.
Narayanan said Myntra wants to create a portfolio worth $1 billion over the next three years with the brand accelerator programme, which is Myntra’s equivalent of a venture capital arm.
The brand accelerator programme is part of Myntra’s efforts to shift sales away from discounts, differentiate its platform and stop Amazon India from increasing its market share in fashion. In the market share war between Flipkart and Amazon, fashion is the only category in which the former consistently has a huge lead. Between itself, Myntra and Jabong, Flipkart dominates online fashion sales; the company is trying to preserve this through initiatives such as the brand accelerator programme.
Myntra also owns more than a dozen private brands including Roadster, HRX and Moda Rapido. The private brands will contribute about 30% of its overall revenue by the end of the year from 24%.
Narayanan said the brand partnerships signed through the accelerator programme will separately account for 5-10% of the firm’s sales within three years. If successful, this means that up to 40% of sales would come from products that are available only on Flipkart-owned platforms—and not on Amazon.
“With Myntra, these brands get massive traffic, consumer data insights both online and offline and sourcing power. We can guide brands on where to open stores, which price points sell, which styles are popular, etc. We also have deep sourcing expertise because of our private brands. For us, with the brand accelerator, we add more unique products for our customers, increase our exclusive offering and we get higher margins,” Narayanan said.
Chemistry, which has a reach of about 500,000 customers, expects its partnership with Myntra to increase its reach to three million customers by 2020. AKS expects to increase annual gross sales to $60 million from $6 million by the same time, according to a statement by Myntra.
“Myntra’s expertise in building successful online brands over the years, backed by strong technological support will aid us in shaping the future of Chemistry and establishing it as one of the foremost fashion brands in the country. We expect the online sales to become 50% of the brand sales in 3-5 years,” Chemistry CEO Sunil Jhangiani said in a joint statement with Myntra.