Fashion e-commerce company Flipkart recently infused funds worth $54 million in online fashion platform, Myntra. Disclosed in regulatory filings in Singapore, this investment marks the second funding round from Flipkart within a year. In March 2023, Flipkart had infused $105 million into Myntra.
Despite facing challenges, Myntra continues to show promise. For the fiscal year ending March 31, 2023, Myntra’s operating revenues grew by 25 per cent to Rs 4,375 crore, although its net loss widened to Rs 782 crore.
The company's India unit, Myntra Designs also received a significant investment of Rs 689 crore from Singapore-based FK Myntra Holdings.
Myntra has been strategically expanding its portfolio by adding international brands, with a focus on premium offerings that have demonstrated rapid growth.
However, there has been a softening demand for online fashion in lower-price segments. Notably, Myntra recently secured exclusive rights to sell products from Turkish brand Trendyol and partnered with French apparel brand Kiabi to enter the Asian market.
With over 420 global brands in its portfolio, Myntra derives a quarter of its revenue from international labels, marking significant growth from just two years prior. The company has shifted its focus towards select private labels, streamlining its offerings and undergoing a restructuring exercise that resulted in layoffs last July.
Despite holding a dominant 55 per cent market share in the fashion e-commerce segment, as per a research note by Bernstein, Myntra faces challenges. While it exhibited a 25 per cent growth rate in December 2023, there are concerns about user engagement and transaction rates on the platform. Myntra's gross merchandise value increased only by 12 per cent in FY23 compared to 35 per cent in FY22, reflecting a changing landscape in the online fashion market.
Flipkart's latest investment in Myntra closely follows its own $600 million commitment from parent company Walmart as part of a $1 billion funding round. This capital infusion underscores Flipkart's commitment to bolster its subsidiaries and maintain a competitive edge in the dynamic e-commerce landscape.
