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How Myntra learned to stop worrying and love the rivalry

Myntra to triple warehouse capacity after Amazon?s move to double it.

Online fashion store Myntra has set in motion works for a three-fold increase in warehouse capacity, in tune with expansion of its private label offerings from eight currently to at least 12 by October.

The Bangalore-based e-tailer has commissioned two state-of-the-art automated warehouses in Bangalore and Gurgaon, to be operational in the next quarter, which will take its warehousing capacity from 150,000 sq ft to 450,000 sq ft. Besides, it has acquired on lease a new office in Bangalore to accommodate a bigger workforce, which is set to double from 700 to around 1,500 in FY15.

The big spend on infrastructure is in line with Myntra?s robust expansion plans, which got a shot in the arm following a $50-million funding from investors led by Premji Invest in February, followed by its acquisition by cross-town peer Flipkart in May at a valuation of $350-370 million. Flipkart is also expected to pump $100 million into Myntra over the next few quarters. Besides ramping up its private labels, the e-tailer has plans to launch a string of designers and international brands in near future.

Myntra aims to generate close to a third of its revenue, up from the present 20-25%, from its private labels in the next 12-18 months. ?We are not just retailers but also owners of brands. We have started investing heavily in Roadster. We will add five new private labels between now and Diwali,? said Myntra COO Ganesh Subramanian. The e-tailer has roped in a celebrity to endorse Dressberry while another sports celebrity brand, in line with Hrithik Roshan?s HRX, is on the cards, he added.

Technology, especially mobile apps, will be another area of focus for Myntra. An ios app will be launched in August while non-shopping or engagement apps to deliver fashion-related content are being planned.

The e-tailer, which holds over half of the online fashion space together with Flipkart, will open physical stores in Bangalore, Delhi and Mumbai over the next 18 months to give consumers a touch and feel of its private labels. Besides, it may make them to other retailers or online platforms. ?For now, we will make our private brands available only to Flipkart. We will consider and then go beyond. But, we are open to make them available to other retailers,? Subramanian said.

While Myntra, which has raised $125 million since inception, is strengthening its infrastructure capabilities, global e-commerce major Amazon is not far behind. The $75-billion global giant, which is restricted to being a marketplace for third-party sellers in India, is also building two new fulfilment centres in Karnataka to double warehousing capacity. Amazon expects to start holding its own inventory as the Centre is likely to ease FDI norms for e-commerce, thus allowing businesses with foreign investment to participate in B2C e-commerce and hold their own inventory.

Incidentally, Amazon is expanding its stranglehold on the online fashion space. It has already launched women’s wear, men’s apparel, fashion jewellry and lingerie to cement its position in the high- margin segment.

A bigger delivery bag

* The big spend on infrastructure is in line with Myntra?s robust expansion plans, which got a shot in the arm following a $50-million funding from investors led by Premji Invest in February

* Myntra aims to generate close to a third of its revenue from private labels in 12-18 months

* Technology, especially mobile apps, will be another area of focus. An ios app will be launched in August while engagement apps are being planned

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First published on: 03-07-2014 at 02:00 IST
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