Lifestyle e-commerce Web site Myntra.com is confident of breaking even by early 2013. The company has attracted funding of $40 million till date, including a last round of undisclosed funding. The previous round which raised $14 million, announced in March, was led by Tiger Global and Myntra's (then) existing investors IDG Ventures and IndoUS Venture Partners participated in it.
Speaking to Business Line , co-founder and CEO Mr Mukesh Bansal noted that it takes three to four years for e-commerce sites to break even in the international market too.
“While e-commerce is more efficient than traditional retail (with lesser overheads such as store cost and inventory), there is significant investment required, in technology infrastructure, supply chain and the brand itself. Typically, you require between $50 and $100 million to realise $200 million in revenue,” explained Mr Bansal.
Until such scale is reached, players will have to build capacity for the future, and profitability will come at a much slower pace of growth, he noted.
On Myntra.com, which moved from being a personalisation (on T-shirts, mugs and the like) Web site in 2007 to its present avatar in 2010, he said, “We should break even in early 2013. So far, we have received three rounds of funding and don't see the need for more for another 12-18 months.”
The site claims 2,800 transactions a day, a number growing at 20 per cent a month. The average value per transaction is stable at Rs 1,400 according to the company, as reported by Business Line in September.
The CEO believes that not more than three to four sites will exist within each key category - books, electronics, apparel and footwear - of e-commerce. For Myntra.com, the footwear category contributes 50 per cent to sales.
While the traffic to conversion ratio remains at low single digits, the intent is to move it to ‘mid-single digits'.
The investment is split almost equally between the technology infrastructure, supply chain and the brand. Myntra started advertising on television in July. The increased visibility has helped in recruitment, signing of new brands and forging international tie-ups, said Mr Bansal.