Online shopping retailer Myntra, which recently merged with Flipkart, will soon launch a fashion incubator, a first-of-its-kind move by an Indian startup, in its aggressive push to gain complete dominance in the fast-growing online apparel category. In typical venture capital-style investing, the ecommerce combine will select fashion entrepreneurs, give them a platform to retail, and after six months to a year pick up equity stakes for up to a million dollars in the best performing brands.
Startup incubators are widely run by large technology companies to spot new ideas and talent, but this would be the first such attempt by an Indian e-commerce player.
Flipkart-Mynta will look to select at least three-five such brands annually which can later be retailed on other platforms — online and offline — said a top executive from the company. The first batch of the incubator is expected to roll out in July which will get on board as many as 20 such entrepreneurs.
“The idea is to create sizeable indigenous fashion brands by mentoring young entrepreneurs who do not have access to capital, supply chain and distribution platforms,” said Mukesh Bansal, CEO, Myntra & SVP, Flipkart Fashion. “We want these budding designers to operate as independent entities in the long-term selling to even our rival e-tailers,” Bansal told TOI.
Having merged Myntra with Flipkart last month in a Rs 2,000-crore deal, Bansal said with increased focus on private brands, the combined entity may also evaluate acquisitions going forward to shore up its fashion portfolio.
Abhishek Verma, business head at Myntra, said they’ve roped in mentors for the first batch of the incubator. “We’ve got fashion designers, entrepreneurs and successful names from the business of apparel to be a part of the programme.”
Myntra’s own set of brands clocking sales of upwards of $10 million include the likes of Dressberry and Roadster. “We have an ambitious plan of building multiple hundred million-dollar private brands in the coming years but it’s not feasible to have such a large in-house team therefore, this incubator makes a lot of sense as we scale up our portfolio,” Bansal said.
The fashion e-commerce category is poised to become the second largest, only after electronics, pushing etailers to adopt a frenetic paced growth strategy for the vertical. Amazon, the world’s largest online retailer, which is starting to get a toehold in the Indian e-commerce market, recently forayed into the fashion and apparel category.
In the offline retail world, Future group’s founder Kishore Biyani has been an early backer of several local fashion entrepreneurs who have gone on to create successful brands like AND and Biba. Biyani exited these companies last year only to make windfall gains from his early investments.