Flipkart’s acquisition of Myntra boosted the online retail image of the biggest e- commerce company in the country. The total gross sales of Flipkart and Myntra crossed the $1 billion mark.
Flipkart brought Fashion portal Myntra in a deal to be of approximate Rs. 2000 crores.The deal was brought against the rivaling Amazon for India’s fastest growing online market. The deal is influenced by the two common shareholders – Tiger Global and Accel Partner.
The deal was finalised last year in Singapore headquarters, although they declined to reveal the financial detacts, the share-swap ratio or the specifics how will it be structured. The Co-founder and chief executive of Myntra, Mukesh Bansal announced the merger and introduced his two collegeaus, Sachin Bansal and Binny Bansal from Flipkart.
The merger was done to create the largest e-commerce business in India. Flipkart has number of categories and Myntra focuses on Fashion. So, Mukesh Bansal has joined the Flipkart board and will handle Fashion for both the companies. As Myntra share of 30% online fashion sales, Flipkart has now 50% share in segment that’s nearly 100% annualized growth.
Myntra draws 80% of its customers from the mobile based Application. Myntra expects to increase the share from the m-commerce to a staggering 90% by the end of the financial year.
While fashion for Flipkart and Myntra is expected to close at $1 billion in sales for the current financial year, Myntra independently is on course to clock Rs 2,000 crore in sales or gross merchandise value ( GMV) at a current monthly run rate of Rs 300 crore. GMV, in e-commerce parlance, is the overall revenue generated by an online retailers through the sale of goods on its platform. E-tailers usually make anywhere between 5% and 20% of GMV depending on the category.
Fashion, which includes accessories and footwear, is the second largest category online, after electronics, in the $3 billion strong Indian e-commerce sector, accounting for almost 30% of GMV, a recent report from Morgan Stanley said.