The new FDI norms, in effect from this month, is pushing marketplaces in the country to restructure their businesses. And the latest one to fall in the line is Flipkart-owned fashion portal Myntra.
The marketplace, whose business was largely contributed by exclusive brand tie-ups and private labels, now claims to sell brands through third-party merchants after new FDI norms came into effect.
The company has been roping in new seller entities as the FDI regulation does not allow online marketplaces to own equity stakes in sellers.
Brands including Chemistry and AKS, in which Myntra hold stakes, are now sold on online apparel firm by Wiztech Corp and FashionTech respectively.
Other private label brands are now sold by sellers including Unistand, and Mayazen. Besides, Myntra claims to have over 30 exclusive brand partnerships, which contribute significantly to its online sales.
The company did not have any equity ownership issues to contend with in its seller base, said Flipkart adding to be in complete compliance with the new regulations.
In FY 18, Myntra’s sales took a 79 per cent dip from Rs 2,038.1 crore in FY17 to Rs 427.74 crore. The company’s largest vendor till 2017, Vector E-commerce witnessed over 90 percent reduction in revenue in FY18.
It revenue dip was largely attributed to its revenue transfer to the new enterprise that was formed after it acquired Jabong and restriction by FDI norms that did not allow any of its vendors contribute more than 25 per cent of the volume processed by the company.
Meanwhile, the company has not stopped from coming out with new services.
Recently, Myntra has started offering special occasion outfits including wedding and parties for men and women under Myntra X Flyrobe name. The services are currently available in cities including Delhi (NCR), Hyderabad, Mumbai, and Bengaluru.
The development details are sourced from ET report.