Bengaluru: Flipkart-owned online fashion retailer Jabong aims to grow sales by at least 40% in the next fiscal year, driven mainly by advertising, sales from newer brands and the introduction of private label brands owned by sister company Myntra, a top company executive said.
In an interview, Myntra and Jabong CEO Ananth Narayanan said Jabong will look to hit three key targets by the end of the year.
“We want to hit 40% growth year-on-year. We also want to get Ebitda profitability—we want to see if (Jabong) can get to Ebitda-zero by December. Thirdly, we want to drive growth through new customers, not just existing customers… the sales growth will mainly happen through three things: marketing, selection and private brands,” Narayanan said. Ebitda, which stands for earnings before interest, taxes, depreciation and amortization, is a measure of operating profit.
Flipkart bought Jabong from Germany’s Rocket Internet and Kinnevik AB, a Swedish investment firm, for $70 million last July, trumping a rival bid by Snapdeal.
Flipkart dominates online fashion sales with its ownership of Myntra, the largest speciality fashion retailer, and Jabong, besides sales on its own platform. Flipkart’s fashion business is seen as a key advantage it has over arch-rival Amazon India, which has otherwise matched Flipkart in product categories such as smartphones for much of the past 15 months.
Narayanan said the company will introduce Myntra’s private brands—such as Roadster, Dressberry and Anouk—on Jabong.
“There will be more marketing that we’ll do. Secondly, the app will become much more engaging than what it is now. We can start to integrate more content into the fashion app than we do now. There will be a bunch of product-related changes. Thirdly, we will continue to get more brands on Jabong. Our entire private label from Myntra will be available on Jabong,” he said.
Flipkart bought Jabong from Germany’s Rocket Internet and Kinnevik AB, a Swedish investment firm, for $70 million last July, trumping a rival bid by SnapdeaMyntra plans to invest in and forge strategic partnerships with at least 15-20 local fashion brands as part of its new accelerator programme, and is simultaneously looking to bring more international brands to its marketplace this year.
Myntra, which completed 10 years of operations earlier in February, is also exploring licensing partnerships to bring more top international brands onto its platform this year, while also launching a few more private brands.
Myntra recorded sales of over Rs50 crore from Jabong during its flagship End of Reason Sale in January, according to two people directly aware of the numbers. In January, Myntra reported sales of over Rs850 crore, including gross sales from Jabong.
Narayanan insisted that the company has no plans to kill the Jabong brand, even though questions remain on whether there is a danger of Jabong getting cannibalized by Myntra.
“There’s no question in my mind that the (Jabong) brand is continuing as a separate one. We obviously don’t want to split inventory—we want to make the same inventory available in both places, like a seller would. The customer overlap (between) Myntra and Jabong continues to be 28%, which is great. In the north, there is a huge difference. Delhi-NCR is a very fashion-forward market, a very large market—they have greater share,” he said.