Currency ban: Myntra says no big discounts despite slow sales

New Delhi: Even as e-commerce firms have been hit by the demonetisation move, online fashion store Myntra said it has no plans to increase discount in coming weeks in order to drive sales.

Following ban on old currency notes of Rs 500 and Rs 1000, e-commerce firms such as Flipkart, Amazon and Myntra were adversely affected, especially in the cash on delivery section.

For few days, the firms had put a stop on COD service thus affecting their sales. It was however resumed after new Rs 2000 and RS 500 notes were available in the market.

Myntra, which is owned by Flipkart, was also affected.

However, CEO Ananth Narayanan said on Thursday that Myntra has no plans to significantly increase discounting over the coming weeks to drive sales after the recent demonetisation move hit online retail.

"Post-demonetisation, our growth rate has come down ?which I believe will last two months but it will come back. So we have not decided to increase discounting, but use the opportunity to innovate on digital payments ," he told reporters here.

The demonetisation move had dipped the business of the e-commerce firms in the last three weeks, to overcome which some were reportedly planning to significantly increase discounting over the coming weeks to drive sales.

Narayanan said opting for increase in discounting would hurt margins further, especially after the October sale, when companies sacrificed margins for market share.

"The move to hand out heftier discounts might boost sales in near term, but will hurt margins further... Hence, we will be not increasing discounting," he added.

Replying to a query, Narayanan dismissed speculations that Jabong would be shut down by Flipkart in mid-2017.

"We would be fools to shut down Jabong. It is only speculation amid stories such?as these are appearing in media," he said.

"It will be an independent company. It will be different company that will actually stand for something."

Jabong brand has a distinct position from Myntra as it is seen as a younger brand, which is an asset "which only fools would let it go," Myntra SVP and Head Strategy and Planning Ananya Tripathi said.

"Moreover, why will someone want to shut down Jabong as it brings loyal customers from northern parts of India even as? Myntra brings customers from southern parts of the country," she said.