Amidst plans to expand physical stores, increased promotional expenditure pushes up Yepme’s losses
Yepme, the online private brand retailer has suffered a73% increase in its lossesfor the year 2015-16. The company has spent primarily ondiscounts and promotions, which worked out to Rs. 20 crores and Rs. 115 crores respectively.
Earlier, the company had announced its plans toopen physical storesacross the country. It is targeting400 storesby the end of 2016-17. The company is considering giving outfranchises to have 1,000 storescovering 550 districts within the next five years. Yepme also has anoverseas presencethrough its operations in the UK and US.
Private labels are emerging as the hottest trends over the past few years. Many online marketplaces are turning to their own brands to help in achieving profitability. Yepme seems to have got the idea much before the others. The company also has its presence in leading marketplaces likeJabongandAmazon. Its strategy of selling private brand has helped Yepme to geta higher gross margin(around 30 to 40%) than its peers.
With the recent report of its increased losses, when will a ‘Yepme to turn profitable’ headline blink on the news screens?