Bigger margins tempt Myntra, Jabong to favour private fashion brands

Top fashion e-tailers, Myntra and Jabong, in order to tap bigger margins, are now choosing to tie up with private label fashion brands.
Bigger margins tempt Myntra, Jabong to favour private fashion brands
NEW DELHI: Top fashion e-tailers, Myntra and Jabong, in order to tap bigger margins, are now choosing to tie up with private label fashion brands.
According to industry people, private label fashion and accessories offer margins as high as 55-65 per cent, compared with 30-40 per cent from selling other brands.
The online retailers are seriously calculating their costs and margins as the pressure is mounting on them to turn profitable. These e-tailers have already spent crores on discounts and promotions. Now they are cutting down on discounts and planning to sell their own brands.    
Nowadays, e-tailers are also facing order cancellations and inventory pile-ups as people are buying much less than what was forecasted. 
Jabong, for instance, is reducing orders by as much as 30 per cent at a time when online sales of fashion apparel are growing. It is pushing for its own private labels and brands which it has exclusive deals with. "Brands are our partners. We work very closely in partnership with them to improve sales, stock management and brand visibility," a company spokesperson said, as reported in ET.  
According to Retail industry experts, more than Rs 3,720 crore was spent by online retailers on discounting products around Diwali.
ET had reported earlier this month that a few e-tailers have collectively decided to bring down discounts through coupons to the global average of 20 per cent from as high as 40 per cent in a year's time.
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