Friday 7 July 2017

Profit strategy: Myntra targets offline expansion & Jabong premium labels
With GST at the forefront of ecommerce, marketplace profit strategies took the backseat for a while. But, online fashion portal, Myntra has given profits centre stage again. It wants to break even during the January-March quarter in 2018. For 2018 fiscal, Myntra expects 50% year-on-year growth. The etailer aimed to double sales to reach profitability by March 2018 at the start of the year. In April, it tried shifting from discounting to high fashion. But it appears to have a different focus now.

Profit focuses for Myntra

  1. Offline expansion

Myntra also realised the importance of offline stores and decided to set up its very own. Now, the etailer plans to expand its offline approach to meet profit goals.
“We are also looking to grow our brands offline after the success of Roadster. While we might open a few more stores for Roadster, we will open a store for All About You in Mumbai and HRX in Delhi and Bengaluru, which is an athleisure brand,” said the CEO of Myntra and Jabong, Ananth Narayanan.
  1. Addition of new brands

Besides promoting its brands offline, Myntra is also finalising deals with two additional brands for its brand accelerator programme. The online fashion portal is also trying to recreate franchise deals with brands like the one with Mango. With help from these brands the etailer will launch 256 new outlets by September.
“We are in discussion with two more brands, which will take a month or two to crystallise. With Mango, we will do an omni-channel experience, including returns and purchases. Such partnerships increase profitability for Myntra,” the company’s CEO specified.
Over the past two months, Myntra’s parent company Flipkart introduced two private labels for its fashion segment under Rs.1000. But, Narayanan claimed that these will remain different from what Myntra is offering.
He said, “This is dramatically different from our private labels and we look at Myntra and Jabong as fashion destinations.”

Profit focuses for Jabong

  1. Destination for premium brands

“When we acquired Jabong in July 2016, the net promoter score (a metric which gauges customer satisfaction and ranges from -100 to 100) was in the teens to 20, they were degrowing at 16%. At present, the NPS at Jabong is at 46 and it is likely to grow by 30% this year,” Narayanan said.
He put rumours to rest revealing that Myntra has no intention of shutting down Jabong in the near future. Myntra’s sister company, Jabong, will be positioned as an online luxury destination for premium brands, stated Narayanan.
“Jabong is perceived as a premium destination due to its long association with international brands,” he said.
Together, Myntra and Jabong have captured 55-60% of the online fashion market for Flipkart. Making the etailer’s fashion category the largest in ecommerce, according to RedSeer Consulting. Both fashion firm’s logistics and technology have also been integrated for the purpose of easing them into the profits zone, Narayanan pointed out.

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