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Bengaluru: Online fashion retailer Myntra expects to increase gross sales by 90% to 5,000 crore, net of discounts, this financial year by improving its product selection, adding new categories and re-opening its desktop website, even as it cuts spending on discounts, logistics and other operational costs.

Myntra’s sales estimates do not take into account product returns.

The company which is owned by Flipkart Ltd, is on track to lowering its cash burn rates for the year ending March 2017 after keeping them constant last year, chief executive Ananth Narayanan said in an interview. He declined to disclose Myntra’s cash-burn target but according to documents with the Registrar of Companies (RoC), Myntra reported a net loss of 729.2 crore for the year ended March 2015.

“We’ve streamlined costs in a big way. By improving our product selection, we’ve managed to cut discounts significantly," Narayanan said.

Myntra has also cut supply chain costs and improved its customer engagement rates, he said.

“The number of miles a package travels is much lower now, and we’re also using surface transport a lot more than air (thus cutting costs). We’re planning better in terms of when to increase and decrease our supply chain costs by aligning them with demand. When demand is higher we’re able to scale up by working with external logistics players and not increasing our capital costs. The number of times people come to Myntra has also increased significantly, which lowers our customer acquisition costs," said Narayanan.

If the company achieves its target of cutting spending on discounts and other operational costs, Myntra will become one of the few online retailers that can boast of so-called positive unit economics.

To be sure, many online retailers including Flipkart and Snapdeal have made projections in the past of lowering operational costs but failed to achieve them. One major reason is that customers have a plethora of alternatives to go to in case a website cuts discounts or doesn’t advertise itself aggressively. So, Myntra’s projections of spending cuts will depend to a significant extent on how aggressively its rivals, such as Amazon India Ltd, Jabong and even its parent Flipkart, which now has a larger fashion business, court customers.

Myntra, which became an app-only platform in May 2015, has been forced to re-open its website because it had been losing customers to Amazon India, Flipkart and others over the past year.

The online retailer expects 15-20% of its sales in the current financial year to come from the desktop website, highlighting its misstep in going app-only last May.

Myntra also added home furnishings and personal care products and expanded its jewellery range in April to accelerate sales growth.

To differentiate itself from Amazon, Flipkart and others, Myntra is trying to project itself as a “mass premium brand". 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, such as Roadster and Ether, and introducing fashion content to keep customers hooked.

Earlier this year, it launched a revamped version of its mobile app to boost customer engagement by adding features such as a fashion feed (similar to that of Facebook Inc.), a forum for users to interact with each other and content on fashion brands.

“We’ve cut the long tail and added more big brands, and styles within big brands that have the highest sell-through rates. We’ve added top local and international brands like Louis Philippe, Forever21, and Marks & Spencer that are not available anywhere else and these brands are doing really well for us. We’re using data to figure which brands and styles have the highest sell-through rates. The number of styles (200,000) in our existing categories has stayed the same and will stay the same, but our revenue per style has gone up dramatically," Narayanan said.

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