Online fashion retailer Myntra closed the second quarter of the financial year with annualized gross merchandise value (GMV) of around $500 million and 66 per cent growth in top line, helped by lower discounts, the CEO of the Flipkart unit said on Monday.
“Our GMV is around $500 million. Our plan is to get to $1 billion next year,” Ananth Narayanan said on the sidelines of Myntra’s annual brand summit event in Bangalore.
The latest GMV figure marks an increase of $100 million from May when Myntra founder and board chairman Mukesh Bansal, who is now head of marketplace at Flipkart, said the company was clocking $400 million GMV.
“Our unit economics improved dramatically. We are now a lot more thoughtful on discounting. By the end of 2016 or early 2017 we will become profitable,” Narayanan said.
He highlighted the decrease in discounting as a key reason for improved financial performance. He, however, did not share the actual numbers.
“The scale has increased; so there is a lot more fixed cost absorption. We are now discounting less. Every e-commerce player has been on the drug of discounting. We are trying to slowly wean us off the drug,” he said.
Narayanan said the company has managed to bring down discounting by two to three percentage points. “We will be a mass premium player. Our target is to bring discounting to 30-35 percentage range. It is closer to 40 per cent now,” he said.
Narayanan also said the company would still have to offer its customers a certain level of discounts. “Even in the offline world the ‘end of season sale’ is pretty dramatic. So we are not going to move away from the fashion industry trend,” he said. The company will try to get closer to the trend in the brick-and-mortar retail industry where discounting is typically less than what online players offer, he said.
Narayanan insisted that the company did not go back on its mobile app-only strategy. Myntra, which famously made the access to it only through mobile, recently restarted its mobile web page .
“We are offering an option to share stuff socially. The web page only allows to share it with others; you can’t do transactions on the web page,” he said. “About 82 per cent of our revenue come from repeat customers. So the app experience is working well,” Narayanan claimed.
He said there were 15 million app downloads so far. However, he did not reveal the number of uninstallations. “We don’t talk about uninstallation but I told you the monthly active users are around 7.5 million. Our retention is the highest among e-commerce players,” he said.
He said the company will continue to spend on marketing. About expansion strategy, he said, “I don’t think we will do acquisitions for users since we have already achieved a certain number. Acquisitions for technology and brands are very much open. We want to be a large profitable player.”