The gross merchandise value (GMV) at Jabong has risen 30%, post the merger with Myntra in July, 2016, according to Ananth Narayanan, CEO of Myntra and Jabong.
The gross merchandise value (GMV) at Jabong has risen 30%, post the merger with Myntra in July, 2016, according to Ananth Narayanan, CEO of Myntra and Jabong. Consequently, the combined GMV has risen to $1 billion for year ended March 31, 2017, Narayanan told FE. Of this, 70% is accounted for by Myntra, which acquired Jabong in a $70-million deal. The management hopes to earn a combined GMV of $1.4-1.5 billion (close to Rs 10,000 crore). To attain profitability by FY19, the company will refurbish products and introduce features such as user reviews and looks.
“We ended March with a gross profit and we aim to end this year with EBITDA profitability,” Narayanan said. In 2017-18, the management will look to market Jabong’s products aggressively and to invest about 6-7% of the total sales revenue in marketing.
“We will improve margins by cutting discounts by about 4-5%, lowering supply chain costs and reducing returns,” Narayanan added. The contribution of private labels will remain at levels of 30-40% of the total business; currently they contribute around 23%-30% for Myntra and 9%-20% for Jabong. In May, the company partnered with Mango for online and offline retailing. “Mango is a premium fast fashion brand and we felt this would be a good opportunity for us. We will have 25 stores over a five year period,” Narayanan said.
He added a few more brands, in the women’s space, may be looked at for the franchise model. “Myntra has a Roadster store in Bengaluru which serves as an experience store,” Narayanan said adding another 5-7 stores would be opened during the course of the year in Delhi, Mumbai and Kolkata.
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Myntra manages 50-60% of its deliveries in-house while remaining are fulfilling by third party logistics players including ekart. In April, Myntra acquired InLogg to enhance last mile consolidation of packages. “They brought algorithms in terms of inventory optimisation and last mile consolidation. To further boost the delivery system,we are also combining supply chain networks around Myntra and Jabong,” Narayanan explained.
Prior to the acquisition, Jabong’s sales had been declining by about 20-25% month-on-month, according to Gunjan Soni, Head Jabong and chief marketing officer at Myntra.