Myntra's private labels business turns operationally profitable, eyes sales of more than $300M this yearTeam YS
Myntra's private labels vertical Myntra Fashion Brands (MFB), which delivers about 23 percent of Myntra's business, has turned operationally profitable in the last two months, the company announced on Thursday.
Myntra believes that this performance puts MFB on the path of double digit EBITDA (earnings before interest, tax, depreciation and amortisation) profitability in the next 18-24 months.
With a portfolio of 13 brands, Myntra Fashion Brands aims to deliver sales of more than $300 million this year, growing at more than 100 percent year on year. It had logged sales of $115 last year.
MFB believes that EBITDA or operational profitability is a massive breakthrough for e-commerce in India, as it comes at a time when online commerce is facing questions over losses and burns. Speaking on the occasion, Ananth Narayanan, CEO, Myntra and Jabong, said,
Our private brands have performed exceptionally well. Our approach of building own brands makes us unique. MFB is a key pillar of Myntra’s strategy of building differential offering, cementing shopper’s loyalty and increasing profitability. Myntra Fashion Brands today occupies 9 of the top 20 brands on the platform.
Related read: Can private labels power e-commerce to profitability?
He also shared that Myntra had built their business on the strength of four key pillars:
1. Technology: Myntra's mission is to democratise fashion though technology. Myntra leverages Machine Learning (ML) and Artificial Intelligence (AI) for pricing, demand sensing, planning, and digital brand marketing.
Myntra said in a statement that their brands, Moda Rapido and Here & Now, were the first of their kind to be completely conceptualised and designed using AI and ML.
These brands are not only the fastest growing, but also the most profitable in the MFB portfolio. We see a huge potential here and would like to serve the private brand businesses around the world.
2. Range and Quality: MFB claims to offer the largest width of fresh fashion first to its consumers, with 36,000 options per season. Superior product quality, on the other hand, is driven by continuous innovation based on tech-led consumer insights.
3. Speed: Myntra claims that it is able to work with a shorter calendar time of 45 to 180 days versus the market average of 240 to 450 days. It believes that this “closer to market designing” helps them get the right fashion trends.
4. Identification of unique white spaces: MFB shared that over 50 percent of its business comes from brands that had been built over a period of five years. With a run rate of more than $100 million, they claimed that Roadster is the fastest and largest growing denim/ casual wear brand in India.
Also contributing to MFB's success is HRX – the active wear brand with Hrithik Roshan and All About You – a premium women's wear brand with Deepika Padukone. The team noted,
We have identified white space opportunities over a period of five years to develop a clear proposition through labels like Mast & Harbour, Dressberry, Ether, Anouk, K&K, Harvard and Invictus, etc. These are groomed to be scaled to the next level like a brand. For example, two of these labels, Mast & Harbour and Dressberry have been identified for marketing investments for next year.
MFB is also working on a Brand Accelerator programme to collaborate with national brands in the country, where they see mutual strengths. The team shared that five to seven national brands had already signed up with them on this programme.
Manohar Kamath, Chief of Myntra Fashion Brands further stated that their vision is to build MFB into the largest fashion house in the country in the next five years and be the supplier of private brands to the world. He said,
We are investing in building brand equities, innovating wisely, using consumer / business insights intelligently, building strong vendor relationships, using smart pricing (AI-based tech lead pricing), knowing the shape of our brand price elasticity curve and managing each category differently with tech-led innovation plus visual merchandising.