Flipkart banks on fashion for growth

By

Maverick Martins

Published
Dec 26, 2016

India’s largest online retailer Flipkart is optimistic about its fashion business and expects it to be the first segment to turn profitable in the next financial year.

Flipkart is the undisputed leader in the fashion segment as Flipkart fashion along with its subsidiaries Myntra and Jabong together command about 75% of India's online fashion market.

It accounted for about one third of gross sales in the September quarter, according to analysts and investors, making profitability in this category vital for the overall health of the loss-making marketplace.

Flipkart Fashion is expected to turn profitable by the middle of the next financial year and Myntra, India's largest standalone fashion website, will be profitable at the operational or Ebitda level with annualised gross sales of $2 billion by the end of fiscal year 2018, said Flipkart CEO Binny Bansal in an interview to the Economic Times

“In March, we will be in an extremely good growth momentum, going back to 40% year-on-year growth and then accelerating over the next year,“ added Bansal, insisting that 2016 was a turnaround year for Flipkart.

 “We will be getting into fiscal year 2018 with a growth tailwind, while we entered FY17 with zero growth, he added.

When Myntra snapped up its closest rival Jabong in July for about $70 million, this market was pegged at $2 billion and estimated to grow to $20 billion by 2020, surpassing consumer electronics as the single-largest online category.