Myntra has recently secured a $54 million investment from its parent company Flipkart. This infusion of funds comes at a crucial time for the online fashion platform, as it grapples with intense competition from rivals such as Reliance’s Ajio and Tata Cliq.
As per regulatory filings in Singapore, Myntra’s holding company, FK Myntra Holdings Pvt Ltd, received the funds in January, marking the second investment from Flipkart within a year. In March 2023, Flipkart had injected $105 million into Myntra.
Myntra did not provide a response to an email requesting comment.
In the fiscal year ending on March 31, 2023, Myntra recorded a 25% increase in operating revenue compared to the previous year, reaching INR 4,375 crore. However, despite this growth, the net loss expanded to INR 782 crore.
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In January, Myntra’s India unit, Myntra Designs Pvt Ltd, received INR 689 crore (approximately $83 million) from FK Myntra Holdings, a Singapore-based entity.
Myntra has been actively expanding its range of international brand collections, particularly focusing on premium offerings experiencing rapid growth. Meanwhile, there has been a recent downturn in demand for online fashion in the lower-price segments.
On February 9, it was reported that Myntra would exclusively retail products from the Turkish brand Trendyol, owned by the Alibaba group. Then, on February 14, the French apparel brand Kiabi made its entry into the Asian market through a collaboration with Myntra in India.
As of the latest report on January 24, Myntra’s portfolio comprises over 420 global brands, with approximately a quarter of its revenue generated from these international labels. This marks a significant increase from two years ago when it had 280 international brands in its lineup.
The fashion e-commerce platform has shifted its focus towards specific private labels instead of expanding its array of in-house brands in the apparel sector. In line with this strategy, Myntra conducted a restructuring initiative last July, leading to the termination of 50 employees.
According to a research note by Bernstein in January, Myntra held a 55% market share in the fashion e-commerce segment based on monthly active users (MAUs). Reliance-owned Ajio, meanwhile, maintained its user acquisition momentum, securing approximately 33% market share. Nykaa Fashion, operated by the publicly listed company FSN E-commerce Ventures, accounted for roughly 6% of the MAU share. “In December 2023, Myntra exhibited the highest growth rate amongst peers at 25%,” the report said.
However, according to the report, a closer look at the business suggested that users on Myntra’s app were not transacting as much as previous trends. Myntra’s gross merchandise value grew only 12% in FY23 as compared to 35% in FY22, Bernstein noted.
“The fashion market is extremely fragmented offline, and the online market is seeing similar trends with multiple players emerging to gain share,” it added.
Flipkart’s investment in Myntra has come close on the heels of the horizontal marketplace itself receiving a $600 million commitment from US-based parent Walmart, as part of a $1 billion funding round.
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