Flipkart’s Myntra says to be profitable by 2018

Photo credit : vukvuk / 123RF.

Flipkart’s fashion unit Myntra says it will be profitable in financial year 2018, as the company reaps benefits of fewer discounts, a boost from buying rival Jabong, and a recently-concluded festive season.

Myntra and Jabong will both be retained as separate brands, CEO Ananth Narayanan said at a media briefing in Bangalore on Thursday.

See: Why Myntra ‘lost conviction’ and went back to the website (yes, finally)

“[We have] over 18 million monthly active users… We are on track to achieve scalable and sustainable growth and will be EBITDA [earnings before interest, tax, depreciation and amortization] positive in FY18,” he said.

Flipkart, Myntra and Jabong have swiped 70 percent share of India’s online fashion industry.

Ananth also said the company, including Jabong, is targeting revenues of US$2 billion for quarter ended March 2018.

Flipkart bought Jabong in a deal worth US$70 million in cash from Rocket Internet spin-off Global Fashion Group in July. Together, the companies hold about 70 percent market share in India’s online fashion industry.

Over the past year, Myntra has been focusing on its own clothing brands that are higher margin, cutting back on price reductions, and more personalisation, as it attempts to wean customers away from discount-driven buying. About 22 percent of Myntra’s business comes from its own labels, Ananth said.

Discounts have gone down by 8 percentage points over the same time last year, the CEO said.