While Flipkart has been fighting its main battle with rival Amazon on the multiple products ecommerce business, its early moves to acquire Myntra and create a niche for itself in the online fashion vertical has given it a huge head start and appears to be miles ahead of any other rival. In an internal funding exercise, FK Myntra Holdings Private Limited, Singapore, has also made an investment of Rs 1,147.8 crore ($176 million) in Myntra Jabong.
The actual transfer of these funds occurred in the month of February and has come to light through filings with the RoC. As reported earlier, Myntra has added outdoor gear and outfits from Wildcraft to its products portfolio recently.
This funding is in the form of around 7 lakh shares of Myntra Jabong Pvt. Ltd., being transferred to the Singapore entity at the rate of around Rs 16,000 per share (Face value= Rs 1).
Flipkart has also received funding Rs 4,472 crore in its wholesale arm from Singapore parent in the single-largest fund infusion in the past few years.
As mentioned, Myntra and Jabong virtually straddle the Indian online fashion scene claiming over 70% market share, though some dispute the figure and claim it is only around 55%. Observers attribute this success of Myntra-Jabong, to the company’s ability to develop and promote private labels, in fact, as many as 13 of them. Some of these include Roadster, HRX, Mast & Harbour and Dressberry and the private labels are said to be currently contributing to around 23% of Myntra’s revenue and the company’s aim is to take it to 35%.
Another area Myntra is working on is to expand to offline, opening the Roadster retail outlets and many more are likely to follow. Myntra and Jabong are also expected to stretch their product categories to personal care.
The Flipkart owned fashion e-tailer has also to take a holistic view at the business, the margins and the O2O strategy and so on.