I just spoke to Mukesh Bansal, CEO of Myntra, who told me that the company intends to expand first to Mumbai, Pune, Hyderabad and Chennai. They currently have offices in Bangalore and Noida, and will be setting up mostly sales and marketing offices in a new city every 3-6 months. They’re in expansion mode for 2 years, and expect this round of funding to take them to break even by the next financial year, and last them around 2.5 years. Myntra also intends to expand their team from a current size of 50 people to 100 by June 2008.
I was wondering why they’d need to expand offline – ideally, an online merchandising business should be operating primarily online, with a small team, and leveraging distribution. Bansal said that they don’t look at it at just an online business – there’s a fair amount of supply chain management, which needs to be automated and scaled. Myntra works with over 20 vendors, and will also have to invest in setting up their own operations for new products that they intend to bring into the market – including sports and fashion accessories.
Myntra currently claims to have a client base of over 150 companies and over 50 colleges. Their business has two segments – Individuals, which account for 1/3rd of the revenues (and affiliates and parters account for 1/3rd of that), and Institutions, which account for 2/3rd. A few months ago, they crossed around $1 million (Rs. 4-5 crores), and are growing 10-30 percent every month. The raw material costs are high, so I asked Bansal about their EBITDA margins – he declined to comment, but said their gross margins range from 25-60 percent, depending on the product.