Turning The Tide

Ananth Narayanan came to Myntra with little experience of fashion but he is well on his way to making the online retailer a force to reckon with

- Amit Ranjan Rai

In 2015, when Flipkart hired Ananth Narayanan, then a 38-year-old director from McKinsey, to run its newly-acquired fashion retailer Myntra, the young CEO set up a herculean task for himself: To make Myntra India’s first profitable large e-commerce company. At a time when the top e-commerce companies in India, be it Amazon, Flipkart or Snapdeal, were bleeding, such a proposition sounded quite farfetched. Discounts to lure customers and keep sales volumes high were piling up losses for most e-commerce players. Myntra wasn’t an exception.

A little over 2 years later, Narayanan’s mission, while not achieved yet, looks well on track. In August 2017, the company declared its private label business, called Myntra Fashion Brands (MFB), profitable. MFB makes for 23 percent of the company’s business. Myntra now expects to turn EBITDA profitable soon, perhaps in a month or two. “We are ahead of target in turning EBITDA positive and will announce that soon,” says Narayanan.

How did Myntra’s young CEO manage to get his company on track? He certainly got his initial priorities right — to cut costs, streamline processes, and shift the focus on higher-margin businesses. Through careful inventory management, Narayanan was able to cut discounts and supply chain costs by a few percentage points. While discounts were slashed on popular products that customers were willing to pay full price or near full price, supply chain costs were brought down by increased use of technology and economies of scale.