Flipkart, Snapdeal, Amazon and Aditya Birla Group were all in a race to acquire Jabong, an online fashion retailer.
Flipkart Owned Myntra Buys Jabong For $70 Million
Flipkart owned online fashion retailer Myntra has acquired smaller rival Jabong as it looks to strengthen its portfolio in the high-margin online fashion retail space. Flipkart had acquired online fashion retailer Myntra at an estimated Rs 2,000 crore in May 2014. According to the press release, Myntra and Jabong will have a combined base of 15 million monthly active users.
The move comes at a time when rival Amazon is pumping in billions of dollars to have a run at becoming the leader in India’s fledgling e-commerce space.
The company in a statement said the deal will further strengthen its position as the “leader in fashion and lifestyle segment” in India. It did not disclosing the financial details of the deal.
“Fashion and lifestyle is one of the biggest drivers of ecommerce growth in India. We have always believed in the fashion and lifestyle segment and Myntra’s strong performance has reinforced this faith. This acquisition is a continuation of the group’s journey to transform commerce in India,” said Binny Bansal, CEO of Flipkart, in a statement.
“The acquisition of Jabong is a natural step in our journey to be India’s largest fashion platform. It further strengthens Flipkart Group’s position as the undisputed leader in Fashion and Lifestyle segment in India. Jabong is among India’s major fashion multi-brand e-store with more than 1,500 on-trend international high-street brands, sports labels, Indian ethnic and designer labels and over 1,50,000 styles from over a thousand sellers. We see significant synergies between the two companies especially on brand relationships and consumer experience,” said Ananth Narayanan, CEO of Myntra.
Jabong has been in the market for a sell-off and was in discussion with companies including Future Group, Snapdeal and Aditya Birla-owned Abof among others. Jabong was founded in 2012. In September 2014, its investor, Rocket Internet merged Jabong with four other online fashion retailers in Latin America, Russia, the Middle East, South-east Asia and Australia to create Global Fashion Group (GFG).
According to the Internet and Mobile Association of India, e-tailing has grown at 57 per cent year-on-year, moving from Rs 24,046 crore to Rs 37,689 crore between the December 2014 and December 2015. This is further estimated to touch Rs 72,639 crore by end of 2016.
As per a Rocket Internet investor presentation, Jabong had a net revenue of 32.6 million Euros in Q1 2016, up 14 per cent from 28.6 million Euros in the year-ago period. For FY2015, its revenues were at 122.1 million Euros.