Looking to conquer India's online fashion space with Flipkart's acquisition of Myntra, Flipkart co-founders Sachin Bansal and Binny Bansal and Myntra CEO Mukesh Bansal tell FE's Sayan Chakraborty about future plans in the online apparel space and how they plan to make it the biggest contributor to Flipkart's revenues.
How long have you been working on this deal?
Sachin Bansal: We have been talking to each other for a few months. We started with all kinds of options on the table regarding how we work with each other. We discussed whether it’ll be a partnership or investment. Then we started exploring the acquisition opportunity. As we talked more, we felt that's the right choice.
Binny Bansal: As we talked more, we realised the way Myntra is building the fashion business, it's going to be really successful.
So Flipkart pitched in the idea first?
Sachin: Of course.
When will you be profitable as a group?
Sachin: Profitability continues to be the second prio-rity as compared to growth.
Binny: The market is growing from $3 billion to $50 billion in 2020. This acquisition is not about profitability. It's about getting scale, increasing market share and becoming more dominant in the space.
Mukesh: Fashion gives a huge lever to drive profitability. Similarly, scale also drives profitability. The way we are looking at it, profitability is definitely an option, but today it makes more sense to invest deeply in technology and supply chain and build the brand. Profitability can be achieved by pulling the lever but we don't believe that's the right thing to do.
Is fashion going to be your biggest business?
Sachin: Soon it will be the biggest segment. Our biggest vertical continues to be electronics for now. But fashion will grow faster.
Binny: In terms of transactions, in the long term, we see fashion being the bigg-est, but from a revenue point of view, it’ll be electronics.
Are any investors exiting Myntra?
Mukesh: Investors are thrilled. A lot of them have been part of Myntra's journey for a long time. I am sure the outcome from a portfolio perspective will be appreciated. They also see value upside in future. But, we can't reveal more.
Have you been given any stake at Flipkart?
Mukesh: Sure. Not only myself, the entire Myntra management team and employees will get that option in Flipkart with significant future upside. We are excited about working together.
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