Gap Inc may partner Myntra for e-commerce business in India
Apr 4, 2014
American lifestyle clothing retailer Gap Inc is in the process of finalizing a deal withe-commerce player Myntra to launch its online store in India. This discussion is running parallel with Gap’s plans to rope in Arvind Brands as its local partner for offline retail here.
Myntra is likely to run the $16-billion, San Francisco-based Gap’s online store, a first-of-its-kind move by any of the Indian fashion e-tailers who till now have been selling international brands by importing their merchandise. Gap’s e-store will launch simultaneously with its brick-and-mortar India foray, scheduled for early next year, sources close to the matter told TOI.Gap’s move to bring in a separate, specialist online partner underscores India’s booming e-commerce sales, estimated to touch $8.5 billion by 2016. Fashion and accessories alone could make up a $2.8-billion online market in the next three years, up from $550 million currently, according to a recent report by venture capital firm Accel Partners.
An email sent by TOI to Gap’s press office remained unanswered till the time of going to press. When contacted, Mukesh Bansal, co-founder & 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.”
The fashion e-tailer, which is projecting sales (gross merchandise value) of around Rs 2,000 crore this fiscal, may also announce an exclusive arrangement with the Dutch clothing brand Scotch & Soda through a similar partnership, sources said.
Myntra gets 5% of current sales, estimated at Rs 800 crore, from international brands but it is expected to leapfrog into robust double-digits within a year. Some of the other brands it retails exclusively are Desigual and Stanley Kane, among others. People familiar with Gap’s deal with Myntra said the online retailer will be sourcing merchandise locally, giving it a price advantage.
Gap, which sells other famous brands including Banana Republic and Old Navy, has been in talks with Sanjay Lalbhai’s Arvind to strike an agreement for opening physical stores in India.
Recently, Myntra’s rival Jabong, backed by the German internet incubator Rocket Internet, said it will exclusively launch British brands Dorothy Perkins and Miss Selfridge.The country’s largest online retailers, including Flipkart and Snapdeal, have been upping the ante as they push sales in the fast-growing fashion category. Snapdeal expects to sell Rs 1,000 crore of fashion products by the end of this year.
Robert Bready, creative director & retail head at domestic lifestyle e-tailer Koovs, said that the lack of good quality physical retail space is leading international brands to look at e-commerce as a preferred route into this new market. Also, entering a new market through the digital route is much quicker and cheaper than with physical retail space. Koovs launched the British youth fashion brand New Look recently in India.