Bengaluru: Flipkart-owned Myntra will open offline stores in the next three months at a time its annualized gross merchandise value, or GMV run rate, has hit $1 billion, post discounts, its CEO Ananth Narayanan said on Monday.
GMV, in e-commerce parlance, is overall sales generated on an online platform, not factoring in discounts and returns, out of which e-tailers take home anywhere between 5% and 20% depending on the category. Myntra plans to start physical stores by selling its own brands — Roadster, All About You and HRX — in an attempt to bolster its brand play across channels.
The online retailer, which recently acquired smaller rival Jabong for $70 million to further strengthen its number one position in the fashion and lifestyle e-commerce category, said these brick-and-mortar stores would act as experience zones rather than a platform meant to prop up its sales.
The hybrid model of running online stores with a select physical presence is finding takers for many online commerce companies. Global e-commerce giant Amazon recently opened a brick-and-mortar store in New York. In India, players like furniture e-tailer Pepperfry and eyewear seller Lenskart have explored the offline route as well.
“We are still figuring out what kind of sales we want to do from these experience stores. Right now, we’re talking to traditional retailers to sell these three brands via their offline channels,” Narayanan told TOI. Currently, these brick-and-mortar outlets are being planned in Metros, he said. Myntra’s largest selling private brand Roadster clocked sales of $100 million as private labels contributed around $200 million to the company’s overall sales. The Bengaluru-based Myntra said it is looking to garner 30% of sales from private brands over next few years, having recently bought a majority stake in HRX, a lifestyle brand co-owned by Bollywood actor Hrithik Roshan and Exceed Entertainment. The fashion-focused e-tailer was also close to acquiring the rights for American fast fashion brand Forever 21’s online and offline stores but the Aditya Birla Group clinched the deal.
Narayanan said July was the biggest month for Myntra in terms of sales, putting it close to the $1-billion GMV mark by end of the current fiscal. “We have reduced discounts by almost 10% even as full price sales have gone up twice for e-tailer, he said. “We have taken several transforming steps in the past and offline stores are an addition to that. We have grown 70% annually and continue to have about 80% repeat rate among our consumer base,” Narayanan said. For now, it manages over a lakh shipments every day.
Myntra is aiming to become profitable by next fiscal year. Having introduced home furnishing and jewellery categories, the e-tailer will also list products from niche online jewellery players such as Caratlane and Bluestone, among others, Narayanan said. The idea is to tap the Rs 5,000-20,000 ticket-size sales as average transaction for jewellery online remains in the range of Rs 30,000-50,000.
Home furnishing products currently contribute about 1% of Myntra’s total sales and the category is growing at 50-60% every month. According to sources, improving Jabong’s net promotion score or NPS — which is about 30% — is the first priority for Myntra’s management. Narayanan refused to comment on plans on Jabong’s integration with Myntra. Metrics such as NPS are increasingly becoming important for Flipkart group companies as they try to improve customers’ shopping experience amid a fierce battle with Amazon. Myntra, along with Jabong, has a base of 15 million monthly active users.