Myntra, the leading online fashion retailer owned by Flipkart, has reportedly on-boarded Sane Retails, in order to comply with the new regulations set by DIPP.
The regulations, which were announced in March 2016, dictate that no single vendor can account for more than 25 percent of the overall sales for any e-commerce platform.
With Sane Retails coming on-board, Myntra will primarily be working with the vendor to sell its private brands. With this move, the company will also be reducing its reliance on its largest vendor Vector E-Commerce.
Reports suggests that Myntra is looking to turn Sane Retails into an alpha vendor that has access to the company’s fulfillment centres for efficient inventory storage. Sane Retails will also have access to the company’s logistics infrastructure for faster deliveries.
Commenting on the development, a person aware of the matter, said,
The government has not taken any action on e-tailers yet, giving them ample amount of time to meet the guidelines. Now, to make sure their business structure does not get challenged by the authorities, Myntra is working closely with this seller.
Sane Retails will allow Myntra to have greater control over pricing, discounting, sourcing, and commissions — which the company cannot do with other third-party vendors.
Through this partnership with Sane Retails, Myntra is likely looking to boost sales of its private fashion labels, which currently account for around 22% to 23% of the company’s total sales.
Till now, Vector E-Commerce remained Myntra’s largest vendor. It is being managed by two active directors/partners Bishnu Prakash Hazari and Raghunath Lakshmanan. Interestingly, one of Vector’s owners, Prabhakar Sunder, served as Myntra’s Chief Financial Officer until February last year. Over the period, Vector has contributed nearly 80% of Myntra’s overall sales.
Sane Retails Private Limited was incorporated on 24th May 2016 in Delhi with an authorized capital of ₹10,000,000. The company has listed three directors — Sanjiv Anand, Neelu Anand, and Surinder Kumar Anand.