Online fashion platform Myntra has received a substantial US $54 million investment from its parent company, Flipkart. This injection of funds arrives amidst heightened competition from rivals such as Reliance’s Ajio and Tata Cliq in the digital fashion sphere.
According to regulatory filings based in Singapore, Myntra’s parent entity, FK Myntra Holdings Pvt Ltd, secured this investment in January, marking Flipkart’s second investment in Myntra within a year. Notably, Flipkart had previously infused US $105 million into Myntra in March 2023.
In the fiscal year ending March 31, 2023, Myntra demonstrated a commendable 25% growth in operating revenue compared to the previous year, amounting to Rs 4,375 crore. However, this growth was juxtaposed with an expanded net loss, reaching Rs 782 crore.
Additionally, Myntra Designs Pvt Ltd, the company’s India unit, received a significant investment of Rs 689 crore (approximately US $83 million) from FK Myntra Holdings, further solidifying its financial standing.
Recognizing the evolving landscape of online fashion, Myntra has been strategically expanding its portfolio, particularly in international brand collections, which have shown notable growth, especially in premium offerings. Conversely, there has been a recent softening in demand for online fashion within lower-price segments.
Recent strategic moves include exclusive partnerships with prominent brands. For instance, Myntra announced its exclusive partnership with Turkish brand Trendyol on February 9, and on February 14, it facilitated the entry of French apparel brand Kiabi into the Asian market.
Myntra boasts a diverse portfolio, comprising over 420 global brands, with international brands contributing significantly to its revenue stream. This emphasis on international brands marks a strategic shift from its previous approach of scaling a wide range of in-house brands, a strategy that led to a restructuring exercise resulting in the layoff of 50 employees in July.
In terms of market share, Myntra remains a dominant force in the fashion e-commerce segment, commanding a 55% share based on monthly active users (MAUs), according to a research note by Bernstein. However, challenges persist, as Myntra’s app users are not transacting at the same rate as before. This is reflected in the growth of Myntra’s gross merchandise value, which grew by only 12% in FY23 compared to 35% in FY22, as highlighted in the Bernstein report.
Despite these challenges, Flipkart’s continued investment in Myntra underscores its confidence in the platform’s potential. This investment closely follows Flipkart’s significant financial backing, with its parent company Walmart committing US $600 million as part of a US $1 billion funding round.
Myntra’s recent financial injection coupled with strategic moves in expanding its brand portfolio reflects its commitment to navigate the competitive landscape of online fashion, amidst evolving consumer trends and market dynamics.
