Myntra, the fashion only e-commerce store Flipkart acquired in May 2014, has been sort of a dark horse for the company. While Flipkart’s primary e-commerce unit has been receiving flak and hasn’t been able to convince investors to pool in fresh funds it so badly requires, Myntra has rather performed well and continues to do so.
And realising that, Flipkart has now infused a sum to the north of $50 Million into Myntra to further boost the latter’s market leadership in the segment. There hasn’t been an official announcement — which obviously doesn’t happen in such situations — these findings came out from Myntra’s RoC filings.
According to those filings, Myntra Designs Pvt. Ltd in January received ₹338 crore ($50.2 Million at current exchange rates) from Singapore-based FK Myntra Holdings Pvt. Ltd, a unit of Flipkart Ltd.
This fresh cash infusion couldn’t have come at a better time. Jabong, which is (or we may say used to be) Myntra’s biggest local competitor in this space, hasn’t been faring well. While the company did claim of doing good numbers in January this year, a ventilatory grant which it received from GFG for another year of survival, charts a different story.
US behemoth Amazon too has an “Amazon Fashion” wing, but that hasn’t really been able to pick up much market share as it looks more of a side-product within Amazon’s main platform, rather than a standalone fashion-only platform.
In fact, this very thing could play out as a major advantage for Flipkart. Post that $330 Million acquisition in 2014, Flipkart never merged Myntra into its own e-commerce brand, a step many had considered inevitable at that point of time. And Flipkart not taking that step has helped the company. Myntra has now become a standalone fashion only platform with its own separate fanbase and identity.
Other interesting facts that came out of those RoC filings were of Myntra’s growth. For the year ended 31 March 2015, the company’s revenue grew 77% to Rs.758 crore from Rs.427.26 crore the previous year. Losses, however, almost tripled to Rs.1,126.60 crore in fiscal 2015 from Rs.386.10 crore the year earlier. Gross sales for the year ended 31 March stood at Rs.2,569 crore. In comparison, Jabong posted losses of Rs.454 crore on sales of Rs.811 crore for the year ended 31 December 2014.
It however hasn’t been an all smooth ride for Myntra too. The company recently saw its founder and architect Mukesh Bansal leaving the company in pursuit of fresh entrepreneurial dreams. Its app-only strategy too backfired, with the company being forced to bring the mobile website back online as it was loosing traction.
But with fresh, dedicated cash coming in for the company, it might as well ditch out all those mishaps and march ahead. And looking at Myntra’s goals — achieving profitability by 2017 — Myntra could well be the success story which gets Flipkart more money to run the primary business and ultimately go for that delusional IPO.