Myntra: Myntra secures $54 million fund infusion from parent Flipkart

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Myntra received a $54 million fund infusion from parent Flipkart, at a time when the online fashion platform is witnessing intense competition from Reliance’s Ajio and Tata Cliq.

According to regulatory filings made in Singapore, Myntra’s holding company, FK Myntra Holdings Pvt Ltd, received the fund in January, making it the second investment from Flipkart in a year. Flipkart had infused $105 million into Myntra in March 2023.

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Myntra did not respond to an email seeking comment.

Recent Flipkart investments in Myntra_Mar 2024_Graphic_ETTECHETtech

During the year ended March 31, 2023, Myntra reported 25% growth from a year earlier in its operating revenue at Rs 4,375 crore, even as net loss widened to Rs 782 crore.

Myntra’s India unit — Myntra Designs Pvt Ltd — in January received Rs 689 crore (around $83 million) from Singapore-based FK Myntra Holdings.

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Myntra has been trying to add to its portfolio of international brands collections, with premium offerings showing fast growth. Online fashion in the lower-price segments has lately witnessed a softness in demand.

On February 9, ET reported that Myntra would exclusively sell products of Turkish brand Trendyol, which is owned by the Alibaba group. On February 14, French apparel brand Kiabi entered the Asian market through a partnership with Myntra in India.

Myntra has more than 420 global brands in its portfolio, and gets about a quarter of its revenue from international brands. Two years ago, it had 280 international labels, ET reported on January 24.

The fashion e-tailer has also started focussing on select private labels instead of scaling a wide range of in-house brands it had started in the apparel space. To this effect, Myntra had undertaken a restructuring exercise last July that resulted in the laying off of 50 employees.

As per a January research note by Bernstein, Myntra had a 55% market share in the fashion ecommerce segment based on monthly active users (MAUs). Reliance-owned Ajio continued to acquire users and held an around 33% market share, it said. Nykaa Fashion, run by listed firm FSN E-commerce Ventures, had about a 6% share in MAU terms. “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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