Myntra plans to open offline stores to promote private labels

BANGALORE: Myntra plans to open physical stores across India next year to boost its private labels, even as talks of the fashion portal’s merger with Flipkart continue.

Myntra is likely to continue as a standalone fashion brand even after its expected merger with Flipkart. Which is why the company has been beefing up efforts to promote its flagship private label casual wear line — Roadster.

“We are looking to go offline for pure brand-building, not to increase sales,” chief operating officer Ganesh Subramanian said. “We will start by opening one Roadster shop each in Mumbai, Delhi and Bangalore and later venture into other towns and cities.” Myntra roped in Bollywood star Ranveer Singh to endorse Roadster last month. It also plans to launch two or three more celebrity brand labels this year.

In March, the fashion portal signed up Ogilvy India Worldwide to manage brand-building exercise for its own fashion lines. Myntra, however, declined to talk about their investment on these offline stores. “It is too early to make an estimate,” Subramanian said.

Myntra is not the only one. Online fast fashion retailer DoneByNone aims to earn revenue of Rs 500 crore in the next five years with 50% of its sales from offline stores. “In the next six months, we plan to open our first few high street stores in Delhi. We will then expand to Mumbai and Bangalore,” Amarinder Dhaliwal, CEO of DoneByNonesaid. “Offline stores have a greater customer reach. They add to the strength of the brand, awareness of the brand and also help it scale up.”

Several e-commerce players including baby care retailer Firstcry, nutrition and fitness products retailer Healthkart and eyewear seller Lenskart are already scaling up their offline presence to let customers experience the product before buying and to reach a larger market.

Bangalore-based Myntra, founded by IIT-Kanpur graduate Mukesh Bansal, gets about 20% of its total revenue from its company-owned private label sales and expects it to rise to 35% by the end of the year.

Myntra’s current in-house private label brand portfolio includes Roadster, men’s clothing brand inspired by Hrithik Roshan HRX, plus-size women apparel brand Dressberry and casual wear brand Kook n Keech, and ethnic wear collection Anouk, among others. Myntra has strategically chosen to take the lead in generating more of its business from its own labels, which offer about 35% higher margins compared to external brands.

Myntra said it will look at expanding its private label offerings online before taking to the brick-and-mortar stores. “We will penetrate a few more categories like kids’ private brands and formal wear brands in the second half of the year,” Subramanian said. It expects to turn profitable by year end with a turnover of Rs 2000 crore.

Retailers world over are slowly bridging the gap between online and offline stores, venturing into omnichannel retail. Experts agree. “Offline stores helps in creating trust and connect with customers, especially for experiential categories like apparel, consumers will want to explore the product,” said Pragya Singh, associate vice-president at retail consultancy Technopak.

Estimated at $2.3 billion at present, online retail accounts for just 0.4% of the overall retail market in India, according Technopak. By 2019, it is expected to reach between $19 billion (Rs 1.14 lakh crore) and $38 billion (Rs 2.28 lakh crore), accounting for 2-4% of the overall retail industry.

“Physical retail stores help capture a larger market and build trust in a brand,” said Bharati Jacob, partner at Seedfund. Only 0.4% of India’s total retail business comes from e-commerce.

Similar trends are observed even in mature markets like the US. Many fastest growing online-first retailers in the US such as eyewear brand Warby Parker, cosmetics seller Birchbox and clothing brand Bonobos, have also opened up retail locations to better serve their customers.