Myntra’s Vector E-commerce posts ₹8.72-cr loss in FY16

| Updated on: Jan 19, 2017
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Increase in operational costs hits performance

Online fashion portal Myntra’s largest seller Vector E-commerce Pvt Ltd has posted a 40 per cent growth in its sales at ₹1,747 crore in FY2016 as against ₹1,252 crore in FY2015.

However, the company posted a loss of ₹8.72 crore as against a small profit of ₹6.5 lakh in FY 2015, according to research firm Tofler that gathers data from the Registrar of Companies.

Compared to Vector E-commerce, a company based out of Bengaluru, Flipkart’s seller WS Retail’s sales were up 33 per cent at ₹13,921 crore, almost a seven-fold increase from the former.

Amazon’s seller Cloudtail’s revenues stood at ₹4,591 crore in 2016. These sellers, according to industry experts, contribute close to 50 per cent to the overall sales of the online players, who have other smaller sellers too.

However, the Government has put a rider on the online players willing to get 100 per cent FDI in their company and said that no single seller can contribute to more than 25 per cent to the overall sales of the online companies like Flipkart, Myntra or Amazon.

According to the RoC filings, Myntra said that operational costs have increased significantly thus leading to a loss.

The company, however, also said it is expanding its businesses and scaling up operations and would be tying up with more private brands to improve its bottomline.

Vector E-commerce is the single largest seller and distributor of e-commerce firm Myntra, whose sales stood at ₹1,068 crore and were less than that of the former. Lately Myntra, which acquired its arch rival Jabong last year, has been focusing largely on the private fashion labels to boost sales and margins as they have better margins of 70-80 per cent compared to the global brands.

Fashion labels

Myntra’s move to expand its fashion labels is also triggered by Flipkart’s strategy to increase the pie of fashion segment even as it is pitted against the global giant Amazon in that segment.

Published on January 12, 2018

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