With Mango, the Spanish fashion brand popular with women, Myntra has already set the ball rolling, launching a store in New Delhi’s Select Citywalk Mall. Another store in Mumbai’s High Street Phoenix will be launched this month, with plans afoot to set up at least 25 stores in the next few years. Simultaneously, Myntra will manage the label on Mango.com and distribute the brands on Myntra’s online marketplace including Jabong. Ditto for Esprit.
For Mango, the arrangement with Myntra marks a new chapter in its 15-year-long journey in India. The brand had entered India in 2001 with partner Major Brands, which was its sole distributor in the country, adding DLF Brands, its second partner, later. It exited these partnerships last year before forging a new alliance with Myntra this year.
More in the pipeline
With two deals down and two more scheduled, Myntra says it is looking to strike 15-20 such partnerships in the next two to three years, creating a business that can drive as much as 10 per cent of its revenue. Moreover, at a time when the company’s biggest focus is on turning black, such exclusive deals could prove to be useful.
“The way you should look at this is a consumer brand gets a much faster start in India by partnering with us. We have the data, the ability to market as well as sell, and in a few seasons we’ll even be able to influence what styles and assortment they should bring here,” said Ananth Narayanan, chief executive officer, Myntra.
Mango and Myntra will work on a revenue share model, and the two expect sales to be evenly split between online and offline channels.
Fusing physical and digital
- As master franchisee for global fashion brands Mango and Esprit, Myntra will open stores offline and manage their business online
- It has opened offline experience stores for its brand Roadster
- It has tie-ups with several celebrity brands and plans to take these offline too
“If you go to our Mango store coming up in Mumbai, there are huge screens where you can view the inventory available with Mango throughout India. So you are not just limited by the real estate in the store. We are using that technology and continuing to improve customer experience, while still giving them a touch and feel experience,” Narayanan says.
It is a similar deal with Esprit, with Myntra managing 15 offline stores for the brand over the next five years. While Myntra will manage exclusive stores for these brands, the company says it’s also open to getting these brands into multi-brand retail outlets and is also exploring store-in-store formats in order to improve reach.
While fashion e-commerce is poised to grow massively over the next few years, Myntra is looking at growing sustainably, exploring avenues beyond e-tailing. “It’s a synergy, because we already have the infrastructure and don’t have to build anything new. We are looking at this (offline foray) as a very strategic play,” said Narayanan.
Besides becoming the sole seller for brands both online and offline, Myntra is also exploring picking up stake in fashion brands as it looks to boost its private labels business, estimated to be contributing over 25 per cent to its revenue.
While actual revenue figures are never disclosed by e-tailers, the value of Myntra’s gross merchandise (GMV) sold in the financial year 2016-2017 is estimated to be over Rs 6,500 crore. It is now eying GMV of over Rs 8,500 crore by the end of the current financial year, led by an increased contribution of private labels, which have already turned profitable at an operating level.
Acquisitions such as the one done in 2016 with HRX, the sports and lifestyle brand launched by actor Hrithik Roshan, should help. Myntra picked up a majority stake in HRX, which sells on the e-tailer’s platform. It is also looking to set up offline stores for the brand.