Myntra, the fashion unit of e-commerce major Flipkart, on Thursday said it hopes to turn profitable by 2017 by controlling supply chain costs and slashing discounts. Towards this goal, the firm has taken a strategic call to reduce the cash burn and move towards profitability.
Addressing a press conference here, Myntra which targets to achieve a Gross Merchandise Value (GMV) of $1 billion by 2017, has said that it has reduced its discount offering by 6%. The company has also streamlined its supply chain to reduce logistics costs. Such efforts to reduce costs and drive profitability – still a nascent phenomenon in an industry specialising in deep discounts – have been on since July.
Myntra had clocked $800 million in annualised GMV in January. In October it had claimed an annualised GMV of $500 million. Its nearest competitor Jabong, which has been silent after the senior management exodus last year, clocked a GMV of $165 million till September 2015. To be sure, GMV does not give actual sales figures, as it does not include returns, discount and cancellation into account.
To achieve its stated GMV and attain profitability, Myntra has set up 10-12 member team that has been building new ways to cut costs in the supply chain system by 5%. Myntra claims to have grown at 70% in revenues on a year on year basis in 2015, mainly on the back of the rationalisation measures that it took to cut costs.
“Since the last quarter, we stopped blindly offering discounts. Rather we became intelligent about it and took the help of technology to figure out what discount can be given to which product seeing its price and demand. We don’t want to be a discount led platform but we want to be a mass premium player,” said Ananth Narayanan, CEO, Myntra.
Myntra is powering these reduction in discounts by launching new brands, and coming up with new season collection ahead of other players.