Flipkart’s fashion business has caught up with market leader Myntra, fully owned by the former, and emerged as a dominant player in the online fashion retail space, said three executives aware of the matter.
According to the executives, who spoke on condition of anonymity, Flipkart’s standalone fashion business has caught up with Myntra in terms of gross monthly sales, and during some non-sale months even marginally edged ahead of Myntra’s standalone numbers.
To be sure, including sales from Jabong (which Myntra bought in 2016), Myntra still remains larger than Flipkart’s fashion business. In December, Myntra (including Jabong) generated gross monthly sales of Rs1,000 crore-1,100 crore, much higher than what Flipkart posted in the same month, according to the executives mentioned above. Myntra’s sales numbers were driven by its flagship End of Reason Sale.
Flipkart separately claimed that it was the largest player in the online fashion segment and had overtaken all its online competitors. While Myntra is owned by Flipkart, the former still competes against Flipkart in the fashion retail business, with a number of top common brands such as Adidas, Puma and Nike.
In an interview, Flipkart’s fashion head Rishi Vasudev declined to comment on Flipkart Fashion and Myntra’s numbers, but said that over the past 4-5 months Flipkart’s fashion sales growth had risen sharply. Myntra declined to comment for this story.
“Clearly Flipkart has been at the forefront of the fashion business and it has been growing well. You have seen how (Flipkart CEO) Kalyan (Krishnamurthy) has repeatedly talked about fashion being one of the growth categories. Currently Flipkart Fashion is playing that role within Flipkart and it has been one of the major drivers of growth, especially in terms of customer acquisition and units for the whole company,” Vasudev said in an interview.
While Myntra caters to a more premium, fashion-conscious segment of consumers and therefore typically commands higher average selling prices (ASPs) on unit sales, Flipkart has positioned itself as a mass player. Despite raking in lower ASPs per unit, Flipkart edges out Myntra and all its other competitors in online fashion retail in terms of sheer volumes, said the executives mentioned above. All of them requested anonymity.
“Obviously a large part of GMV comes from mobiles which have much higher ASPs (average selling prices), but fashion has been at the forefront of driving both consumers and units,” said Vasudev.
GMV is short for gross merchandise value, an e-commerce metric that refers to the value of goods sold on a site but does not account for discounts or even sales returns.
Over the past 12-18 months, since former Tiger Global Management executive Krishnamurthy returned to the online retailer in mid-2016, he has pushed executives to grow the fashion business rapidly and set aggressive growth targets for the unit. According to three other people familiar with Flipkart’s strategy, Krishnamurthy has repeatedly emphasized internally that Flipkart needs to have a robust, standalone fashion business that can stand out independently.
Krishnamurthy has also given a free hand to fashion industry veteran Vasudev, who is a former Calvin Klein India and Arvind Brands executive, to expand the business aggressively. Over the past two years, Flipkart has forged alliances with several top brands and offline retailers to boost sales volumes, and emerged as a strong player in key segments of the fashion business, such as footwear.
In the middle of last year, Flipkart’s fashion business also underwent a major revamp and the online retailer cleaned up its marketplace and zeroed in on large, trusted sellers to ensure higher-quality products, while also tightening internal systems and processes. Put together, Flipkart, along with Myntra and Jabong, controls 60-70% of online fashion retail in India and is far ahead of arch-rival Amazon India.
Executives and experts tracking online fashion retail have often expressed concerns over the potential for cannibalization between Flipkart Fashion and Myntra. “There is definitely going to be some overlap. People could buy certain items in certain categories from Flipkart, while others would go to Myntra…But largely, propositions are different for consumers.,”