Myntra is seeking entry into the $60-billion online apparel market in the United States despite recording losses back home. The company has reportedly set up a subsidiary called Myntra Inc, US.
Myntra is used as a "test bed" for new technology and business model by parent company Flipkart. The company is yet to begin its operations. It revealed plans to start the US subsidiary in its annual report for FY15 with the Registrar of Companies (RoC), Business Standard said.
India's online retail sector has witnessed an increase in competition in the last one year. Reliance will soon enter the e-commerce segment with its brand "LYF". In October 2015, the Aditya Birla Group also launched its fashion portal Abof.com, The Hindu said.
"The nuance is I will push for EBITDA profitability because that is important for a sustainable business model. I also want to make sure we are investing for the next 10 years, as the business will be 10-fold. Currently, we are at $550 million gross merchandise value (GMV). Next year, we will become $1 billion, but we have to ensure we're building the organisation for a $2-3 billion GMV," Myntra CEO Anant Narayanan was quoted as saying by Business Insider.
According to Narayanan, the company will turn profitable by the end of 2016.
In FY 2015, the company reported a loss of Rs 740 crore on revenue of Rs 758 crore. The losses rose due to splurging of revenue on advertising and cutting down on costs of products, the company said in a filing with the RoC.
The company has been trying to get its users to download its mobile app. Since its acquisition in 2014, Flipkart has "infused" Rs 1,150 crore into Myntra. In terms of contribution to Myntra revenue, private brands contribute 20 per cent, which is soon expected to be increase to 30 per cent.