Edited by Vani Rao
Gap’s e-store may be launched early 2015 with its brick-and-mortar Indian store
The Gap Inc. (NYSE:GPS), a San Francisco-based global specialty retailer that markets its products under the Gap, Old Navy, Banana Republic, Piperlime, and Athleta brand names, is in the process of finalizing a deal with Indian e-commerce player Myntra to launch its online store in the country, according to The Times of India release dated April 3, 2014.
The culmination of these talks will likely result in Myntra handling the operations of Gap’s online store. This move will give Myntra the first-mover advantage in the crowded Indian e-commerce space since Indian fashion e-tailers have so far been selling international brands by importing their merchandise. Gap’s deal with Myntra will also see the online retailer sourcing merchandise locally, giving it a price advantage over other e-commerce players.
Gap is also in talks to rope in Arvind Brands as its local partner for its offline retail store in India. By early 2015, Gap plans to launch its physical store along with its e-store.
With the recent talks, it looks like Gap firmly believes in India’s booming e-commerce sales, estimated to touch $8.5 billion by 2016. Moreover, Gap’s move to bring in a specialist online partner underscores this belief. According to a recent report by venture capital firm Accel Partners, the fashion and accessories segment alone could balloon into a $2.8-billion online market in the next three years, a sharp uptick from the current level of $550 million.
Myntra Looking for Partnerships with Other Global Brands
Mukesh Bansal, Co-founder and CEO of the Bangalore-based Myntra, said, “We are in talks with multiple international brands all the time. However, we will be making some announcements on this front over the next few months.” Myntra is projecting sales (gross merchandise value) of around Rs2,000 crore this fiscal. As part of its growth plans, Myntra may also announce an exclusive partnership with the Dutch clothing brand Scotch & Soda through a similar partnership.
Myntra is looking to be counted among the e-commerce heavyweights and is targeting robust double-digits within a year. It now gets 5% of its current sales, estimated at Rs800 crore, from international brands. Some of the other brands that it exclusively retails are Desigual and Stanley Kane, among others.
Set up in 2007, Myntra has been undergoing a strategic makeover over the past few years by re-inventing itself as an online apparel merchandiser. Moreover, it is looking to target the tech-savvy Indian consumers who now carry out most of the online shopping through their smartphones through its mobile phone platform.
In February 2014, Myntra raised a fresh round of funding from a group of investors led by Premji Invest, the investment company floated by Azim Premji, Chairman of Wipro. With this fund infusion, Myntra’s total equity capital raised now stands at $125 million, contributed by Premji Invest, investment firms Tiger Global, NEA-IUV, IDG Ventures, and Accel Partners. Myntra now has about 50,000 fashion products from over 600 brands.
As per Comscore, a marketing research firm, among the e-tailing sites, Myntra had the highest number of unique visitors at 24 million in December 2013. It was followed by Jabong.com, which had nearly 20 million unique visitors during the same period.