No more high discounts from Myntra and Jabong
New Delhi- With the Food-panda bidding to close its Indian business, two India's fashion eCommerce giants Myntra and Jabong planing to change their marketing strategy soon. In the bid to stop further loss and gain traction in Indian fashion market, now there will be significant drop in discounting strategies.
Ananth Narayan the newly appointed CEO of Benagluru based Myntra told from December now on we are planing to drop 3-4% discounts in order to avoid further loss and start gaining profits.
FY March 2015 Jabong's total sale crossed to 1000 cr sales mark even though the net loss was of 56cr from 34 cr a year earlier. According to Sanjeev Mohanthy Jabong's CEO we are planing for better products and assortment also efficiencies at various levels such as warehouse, also reducing discounts for ti incur the loss.
Gurgaon-based Jabong, a unit of German ecommerce incubator Rocket Internet, posted a three-fold increase in the net loss in March 2015, reason is due to deep discounting. Xerion Retail, which now runs Jabong, which was earlier founded by Praveen Sinha and Arun Chandra, posted a loss of Rs 43.6 crore, according to Registrar of Companies filings.
We can not loose hope as India's ecommerce market has huge growth potential as predicted by Goldman Sachs, India's eCommerce market is set to soar to $103 billion by FY20 from $26 billion at present.
Jabong had 43.6 Cr. loss in FY15, Myntra already started to reduce its discounts to gain traction, Jabong is planing for same.
The new CEOs of both the companies have been entrusted with the task of steering their respective companies towards profitability, which they plan to achieve by checking heavy discounts and bringing in supply chain efficiencies. Myntra, which became the first ecommerce player to go app-only, said it has reduced their supply chain cost by 5% in the last quarter. The etailer is now looking at further reducing the cost by 2%.