The leading online fashion retailers Jabong and Myntra are in plans to reduce the discounts that they offer in order to lure the buyers to their portals. This move is to check their mounting losses and also to steer towards the direction of profitability.
In October 2015, Ananth Narayanan became the CEO of Flipkart owned Myntra. He stated that the largest fashion portal in the country has already minimized the discounts by 6 percent in the last quarter of 2015. The discounts will be further reduced by 3 to 4 percent. The Bengaluru based firm is moving towards profitability in the upcoming fiscal year.
The CEO and Managing Director of Jabong, Sanjeev Mohanty, who took charge last month, stated that the company will reduce the discounts to minimize losses. He stated that they will bring discounts down by choosing better products and improved assortment of products. They are looking to create efficiencies at different levels such as supply chain, warehouse and other aspects as well.
Jabong is owned by Xerion Retail that has crosses Rs 1,000 crore sales mark in the fiscal year that ended in March 2015. Its net loss has totaled to Rs 43.6 crore from that of the previous year, which is Rs 16.6 crore.
Mohanty added that Jabong is attempting to trim the losses in another year’s time. It is looking forward to bring a new pricing strategy to cut the losses. The Indian ecommerce companies have received billions of funds from the investors, and they have been luring the online shoppers with discounts between 30 percent and 80 percent.
The high initial investments and very high advertising and promotional spends along with the deep discounting to lure more customers have forced the e-commerce companies to face huge losses.
The new CEOs of these companies have been handed over the task of steering their companies towards profitability. To achieve this, they need to keep a check on the huge discounts and bring in better supply chain efficiencies.
