Myntra turns around Jabong’s fortunes
Jabong on Thursday said it saw a 50 per cent month-onmonth growth in revenue during October, closing the month with positive unit economics for the first time in its history.
The development comes roughly three months after Flipkart’s fashion unit Myntra acquired the lossmaking Jabong for $70 million from Rocket Internet.
Myntra Chief Executive Ananth Narayanan said many factors helped turn around Jabong’s fortunes, the most important being access to Myntra and Ekart for logistics. Over the course of three months, discounts on Jabong have also been slashed by 2-3 percentage points to make the company’s unit economics positive.
“We have made the selection better, have cut out items that were not doing well and have introduced a few Myntra brands. These made for higher margins. The older customers of Jabong have started returning,” said Narayanan.
Jabong drives close to a third of Myntra’s revenues and serves a large base of users that do not shop on Mynta. The overlap of customers between the two platforms is 30 per cent, according to Narayanan.
Sales on Jabong in October were boosted by festival discounts that ran alongside parent Flipkart’s Big Billion Day sale, during which it said it sold 15.5 million items on its three platforms. The company claims it is the largest player in India’s high-margin online fashion space.
“Next year, I’m hoping Jabong will grow between 30 and 50 per cent, which will be slower than Myntra because it has come in from a negative growth spiral. Myntra is closer to 60 per cent in terms of growth,” Narayanan added.
Myntra has set up a joint team to figure out how the platforms will differentiate themselves.