Cash crunch: Myntra sees a demand rebound in 3 months

Fashion and lifestyle platform Myntra, a Flipkart-owned company, has witnessed 80 per cent year-on-year growth, hitting a revenue run rate of $1 billion. The fashion e-tailer is targeting to turn EBITDA profitable in the Jan-March quarter of 2018, and achieve a revenue run rate of $2 billion in the next fiscal, said Ananth Narayanan, CEO of Myntra and Jabong.

Narayanan said while demonetisation saw the company’s growth-rate drop from 80 per cent to 50 per cent, he sees demand and growth bouncing back in the next three months.

The positive side, he said, was that card-on-delivery payments that constituted 5 per cent of Myntra’s cash-on-delivery payments, has now grown to 50 per cent of COD payments, resulting in 70 per cent of all transactions going digital.

“It’s been the best year for Myntra so far, where we have grown at double the industry rate. And the reason for the growth is our acquisition of Jabong, which became unit economics positive for the first time in October, and our monthly active user base that has grown to 18 million (Myntra - 13 million, Jabong - 5 million),” said Narayanan.

Before acquiring Jabong, Myntra and Flipkart together held 60 per cent share of the online fashion and lifestyle market in the country. Today the trinity of Flipkart, Myntra and Jabong command 77 per cent market share, he said.

Myntra will be the first company to get to profitability in the Jan-March quarter of 2018, he said, adding that this will happen because of the deep collaboration with over 200 brands.

Claiming that Myntra’s NPS (Net Promoter Score) is 20 points ahead of its nearest competitors, Narayanan said: “We want to get to 60-plus in NPS. As a mass premium platform for fashion, we have introduced ‘Try and Buy’, a new service that allows customers to order 2-3 items. The service delivery agent waits for the customer to try it on and return the ones that don’t fit, solving the biggest problem of size and fit. This service is available in 10 cities and we already have 10 points NPS difference in these cities; we plan to soon scale the service to 25 cities.”

The company has started a Brand Accelerator Programme that is working with 3-4 smaller brands that it hopes will grow with the e-tailer’s marketing platform, design capabilities, sourcing/supply-chain expertise, customer insights etc.

The company is looking to grow its engagement with smaller brands to 20-25 brands, which will contribute to 10 per cent of its revenue.

To unlock its next phase of growth, Myntra is pushing big on technology innovation and integration with its brand partners, to enable brands to make available inventory across the country to customers when they need it; assist brands in packaging; and handle returns more efficiently, he said.

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