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Flipkart-owned fashion e-tailer Myntra plans to make growth-linked equity investments in 15 emerging Indian fashion brands that are part of its Brand Accelerator Programme launched in June 2017.
The investments will largely be in exchange for 3-5 per cent stakes in the brands. Myntra aims to drive 10 per cent of its platform revenue through the accelerator brands by 2020, a top executive told BusinessLine .
The Brand Accelerator Programme seeks to support small domestic fashion brands in every aspect of their business and help them become big national brands, both online and offline, in 3-5 years.
Except for Wildcraft, in which Myntra has picked up a 5 per cent stake, all the other brands will get growth-linked equity investments on achieving YoY sales targets on Myntra and Jabong.
The brands are 2GO, AKS, PrettySecrets, Carlton London, Chemistry, Sassafras, Vishudh, Tokyo Talkies, Highlander, Locomotive, Ecko Unltd, Tangerine, Tomatillo and Blush by PrettySecrets. Each has offerings in specific categories such as athleisure, men’s formal wear, women’s ethnic wear and lingerie.
“The Myntra Accelerator Programme is one of its kind in India with a portfolio of 15 brands that contribute 3.5 per cent to our platform revenue,” said Ananth Narayanan, CEO of Myntra and Jabong. “These are growing 300 per cent YoY, relative to our platform that is growing at over 50 per cent YoY. Historically, Indian brands haven’t been able to scale and grow because they lack consumer data or distribution muscle; we provide both. This programme is a way for Indian brands to become big, national ₹1,000-crore brands in 3-5 years.”
Success stories
For instance, ethnic women’s brand AKS has grown almost 500 per cent YoY to reach the top three in its category. It has acquired two lakh customers and launched a range based on Vorta, the Myntra AI tool for design prediction.
Men’s casual wear brand Highlander has reached the top five in the category, growing at 200 per cent YoY, acquiring 80,000 new customers.
Myntra is investing in the brands not for any financial returns but to engage with them over the long term, said Narayanan. “We will continue to on-board 5-10 more brands in women’s western wear, men’s formal wear and sports wear. It takes three months to on-board a brand because we look for good design sensibility, entrepreneurial hustle and culture fit before we take them on,” he added.
The growth targets for brands is not just about their revenue contribution to the platform and category they operate in. “The targets include high quality products, low returns in the category and a strong customer happiness quotient,” said Narayanan.
Myntra's private label brand portfolio including its flagship brand Roadster, Anouk, All About You, Mast & Harbour, DressBerry, Kook N Keech etc, currently contribute to 25 per cent of its platform revenue. If the Accelerator Programme delivers on target, then Narayanan will have succeeded in garnering 35 per cent of Myntra's platform revenues from private label and accelerator brands by 2020.
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