Digital fashion market struggles as Myntra reports revenue contraction in FY26

India’s digital fashion market is grappling with rising marketing overheads and structural shifts in fulfillment unit economics. As per financial disclosures from premier fashion e-tailer Myntra, the company’s operational revenue contracted by 13.5 per cent to Rs 5,242.5 crore in FY26, alongside a bottom-line reversal to a net loss of Rs 579.4 crore. A primary reason behind this margin compression is a 53.2 per cent decline in internal logistics services income, coupled with customer acquisition expenses that expanded 10.5 per cent to Rs 2,326.5 crore - accounting for 41 per cent of overall operational expenditure.

Digital fashion retail is experiencing a fundamental rebalancing where customer acquisition yields are diminishing relative to historical marketing investments, notes Vikram Desai, Senior Retail Analyst,Capital Insights. To regain profitability, platforms must align ad expenditure with core marketplace monetization rather than relying on volume-driven logistics scale, he adds.

Unit economics challenge platform profitability metrics

In FY26, Myntra spent Rs 1.10 to generate each rupee of revenue, dragging EBITDA margins to -7.09 per cent. Although marketplace commissions held steady at 50.7 per cent of operational earnings, aggressive ad-tech spending nearly doubled the platform’s advertising revenue of Rs 1,236.4 crore, highlighting the financial friction in driving top-line growth across competitive retail corridors.

Targeting 100 million active consumers

A subsidiary of Flipkart, Bengaluru-based Myntra leads India’s fashion e-commerce market across apparel, footwear, and beauty. Founded in 2007 as a personalized gift portal, it evolved into an apparel powerhouse targeting 100 million active consumers through international brand onboarding and quick-commerce pilots, balancing Rs 5,242 crore in operating revenue against ongoing margin pressure.