Myntra to increase margins by adding private labels

Leading fashion e-retailer Myntra, now a part of Flipkart, is looking at adding more private labels to increase margins. Fashion is considered high margin business offline, as well as online, and e-commerce companies along with brick and mortar firms are increasing fashion merchandise offered by them. The apparel e-retailer is also working on cutting costs, improving back-end supply chain efficiencies with an aim of emerging strong and break even in the next 15-18 months.

Myntra plans to double the share of private labels, or own brands, in its overall sales to 40 to 50 percent from the current 20 percent, which will increase its profitability. Margins from in-house brands are 60 to 70 percent higher compared to other categories. Myntra also plans to build warehouses for each region, with a big facility near Mumbai to cater to the western region and another one for the eastern part. It has expanded its warehouses in Bengaluru and Gurgaon from 50,000 square feet to two lakh square feet.

On the cards are three private brands, including one for kids. The company is also planning to develop sourcing hubs in China and Turkey for its private brands business. Its Roadster brand has already touched a figure of Rs 100 crores by sales.

A recent report by Google-Forrester said India will have 100 million online shoppers by 2016 and India's e-tailing market will touch 15 billion dollars (about Rs 92,600 crores) by then, up from just about 3 billion dollars (over Rs 18,500 crores) now even as the customer base is expected to grow to 100 million by 2016 from 35 million this calendar.