 "Ananth Narayanan Chief executive officer, Myntra")
E-commerce portal Myntra is looking at expanding brands and improving margins, as it aims to become profitable this year. The Flipkart-owned company expects actor Hrithik Roshan’s HRX to be among its top brands and is looking at offline stores as well. Chief Executive Officer Ananth Narayanan, in an interview with Alnoor Peermohamed, claimed the unit economics were quite positive. Edited excerpts:
How does the investment in HRX make sense for Myntra?
We’ve always believed in the fashion and lifestyle space, as India has few brands. So, we believe, as the leading online fashion and lifestyle retailer, we should actually create brands. Myntra Fashion Brands, our core asset, creates brands.
We’ve already worked with HRX for a couple of years. Therefore, we want to try and build the brand. A stake in the brand will align our interest for the long term.
I’m pretty sure the space HRX plays in — health and fitness — will become very large, and there are a few players in it. So, I think this is a very good investment for us.
How will HRX augment Myntra’s revenues?
It will be one of our biggest private brands, definitely among the top three.
We expect it to scale in a healthy manner — at the same rate as our platform, or even higher.
You have said in the past that exclusive brands have better returns. How will HRX fit in?
It’s very similar. Now that we co-own the brand, I think we will actually be able to retain margins. The design philosophy of the brand can be jointly explored, so we will bring customer insights. Obviously, Hrithik brings a lot of his brand personality around fitness and I think the combination will be very interesting.
Is Myntra looking at acquiring any other brands?
We are always open, we keep scanning. We look at consumer data to find where gaps are, and when we find a gap, we see if there are any brands we can invest in or tie-up with. It doesn’t always have to be an investment. Sometimes, we just tie up but we keep looking.
Do you plan to use these brands to expand abroad?
Not right now. At this point, the market in the country is quite large and under-served. We need to get that right first.
Myntra had spoken about offline expansion prior to its acquisition by Flipkart in 2014. Why has it taken so long?
My sense is that omnichannel has been a bit of a buzzword and I think the time for it is now starting to appear. It’s not only about opening stores. I think Myntra is always about partnering with brands. I’ve often spoken about our ‘House of Brands’. We partner with our brands. The omnichannel can mean one of two things — one is a partner with brands to give consumers a different experience with the advantages of online and a part of offline. So, things like returns can actually be managed.
Things like size and fit and trial can be managed.
We’re working with a few brands, saying can we enable omnichannel with them.
The other part is for our own private brands to create experience stores but these will be very technology-oriented experience and won’t be the standard run of the mill stores.
What you’re saying is something like try offline and buy online?
Correct. I don’t want to get into the details. Hopefully, it will be a delight for customers when they see it, but we will use a lot of technology to make it a very different experience.
Rivals such as Aditya Birla Group and Reliance have built an offline presence and they’re now coming online. They say the stores give them localised reach in terms of deliveries and returns. Is that what you are trying to build?
Our reach today is 19,000 pincodes. It’s very hard to compare to an offline retailer. The way I view omnichannel is more around the experience and less around the delivery. There could be something around reverse logistics. It will make returns easier.
We’ve been through almost one quarter of the return of Myntra’s website. How have things been?
Very good. Our target, when we spoke about it, was about 15 per cent (revenues) and I think we are roughly in the 10 per cent range. We are continuing to grow (slice of revenues from the website) month on month. The learning is that giving consumers a choice is a good thing.
The second is that I’d stand a little bit by our mobile strategy. A big chunk of our revenues still comes from our app and mobile. I believe going app-only got us to create a much better experience.
You have said Myntra will be profitable this year. Are you on track?
Our unit economics are already quite positive and we are continuing with that. I had earlier spoken that we would be profitable by the end of this year and I hope it happens.
