BENGALURU: App-based fashion retailer Myntra is banking on its in-house brands to push its growth at a time when local e-commerce players are under pressure to cut their cash burns and turn in profits. Roadster, the top selling brand for Myntra Fashion among a dozen of its own labels, has clocked sales of Rs 320 crore so far this year and aims to become a $100-million, or Rs 650-crore, brand by end of 2016, a company executive told TOI. Myntra's other private brands such as HRX, All About You, and Dressberry are among the highest-grossing private labels after Roadster. Private brands offer retailers better margins as they are manufactured by them.
The Bengaluru-based Myntra, which was acquired by Flipkart last year, clocks over Rs 700 crore in sales from all of its private brands and is set to close the year at $550 million in gross merchandise value, or GMV. The GMV is the overall sales done by merchants on an e-commerce platform, without factoring in discounts, out of which the e-tailer gets between 5-20% as margin depending on the category which qualifies as its revenue.
Myntra's focus on creating online private labels, a strategy it adopted early on, puts it in direct competition with in-house brands of traditional brick-and-mortar retailers such as Shoppers Stop, Lifestyle, Future Group and Spencer's. Most other specialized online fashion players like Jabong do not have a robust private brand strategy so far.
The Kishore Biyani-led Future Group's private brands Bare and Indigo Nation do business worth Rs 400 crore and Rs 200 crore, respectively. For Lifestyle International, the contribution of private labels has been consistent at about 30% of total sales with double-digit growth in the recent past. For most of the traditional retailers, private brands constitute about 25-30% of their total revenues. "Melange is our largest brand (Rs 140 crore) followed by Code at over Rs 100 crore. Private labels have become a key and constant part of revenue generation for us," Kabir Lumba, MD at Lifestyle International, said.
The Bengaluru-based Myntra, which was acquired by Flipkart last year, clocks over Rs 700 crore in sales from all of its private brands and is set to close the year at $550 million in gross merchandise value, or GMV. The GMV is the overall sales done by merchants on an e-commerce platform, without factoring in discounts, out of which the e-tailer gets between 5-20% as margin depending on the category which qualifies as its revenue.
Myntra's focus on creating online private labels, a strategy it adopted early on, puts it in direct competition with in-house brands of traditional brick-and-mortar retailers such as Shoppers Stop, Lifestyle, Future Group and Spencer's. Most other specialized online fashion players like Jabong do not have a robust private brand strategy so far.
The Kishore Biyani-led Future Group's private brands Bare and Indigo Nation do business worth Rs 400 crore and Rs 200 crore, respectively. For Lifestyle International, the contribution of private labels has been consistent at about 30% of total sales with double-digit growth in the recent past. For most of the traditional retailers, private brands constitute about 25-30% of their total revenues. "Melange is our largest brand (Rs 140 crore) followed by Code at over Rs 100 crore. Private labels have become a key and constant part of revenue generation for us," Kabir Lumba, MD at Lifestyle International, said.
Myntra's CEO Ananth Narayanan told this paper that the firm is expecting to rake in as much as Rs 2,000 crore from its private brands at the end of 2016, a timeline by when Myntra plans to hit $1 billion (Rs 6,500 crore) in GMV. Narayanan's offline rival Shoppers Stop currently garners over 17% from its leading private brands like Stop and Life and it aims to take the same to 20% by 2017, Shoppers Stop's MD Govind Shrikhande said.
Given its leadership position in the fashion and lifestyle market and scale, a successful private label strategy may enable Myntra to enjoy margins to the tune of 40-50%, experts said. Myntra has more than 15 million users on its app and claims to have over 7 million of them as active users every month. However, its app-only move, which kicked in earlier this year, drew a negative response from many customers. Seeing the backlash, it has now rolled out a mobile website, which is currently in pilot stage.
Myntra, going forward, plans to retain its strategy of being a platform for mass premium products. A larger share of private brands will protect Myntra from third-party merchants or brands who are not keen on the discounting model of e-commerce firms.
Narayanan said with an increased focus on private brands, the company has started moving away from deep discounting in order to achieve profitable growth. Abhishek Verma, head, Myntra Fashion, said, "Each private brand helps us to create a different and unique identity in the consumer's mind. We will be expanding the product portfolio among the 12 private labels with a larger push on women-centric fashion products.
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