In a bid to maintain its position as the e-commerce market leader, Flipkart Limited has acquired online fashion portal Jabong via its unit Myntra.
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Following a strategic review of its Indian operation, the GFG Board concluded that Jabong’s position as India’s leading fashion e-commerce destination would be best served through a business combination with a local player.
Jabong has been looking for buyers for sometime now, owing to its sliding valuation, reluctance of investors in pushing in money, and competition from biggies like Myntra and Amazon. The two have signed a definitive acquisition agreement to create India’s biggest online fashion platform. “We have always believed in this segment, and Myntra’s strong performance has reinforced this faith”, said Binny Bansal, co-founder and CEO of Flipkart. Dafiti (Latin America), Jabong (India), Lamoda (Russia and CIS),Namshi (Middle East) and Zalora (Southeast Asia and Australia), to be known as GFG i.e. Global Fashion Group. The details of the deal are not known yet.
With their vast market presence, Flipkart will now have access to 15 million active users from Myntra and Jabong together. We look forward to working with the talented Jabong team to shape the future of fashion and lifestyle ecommerce in India. The deal was made through Flipkart’s own apparel e-tailer Myntra, however, the financials of the deal were not made public. Swedish investment firm Kinnevik also owns a large stake in Jabong’s parent Global Fashion Group.
Some of global brands that will be exclusive to both the platforms include Dorothy Perkins, Topshop, Tom Tailor, G Raw Star, Bugatti Shoes, The North Face, Forever 21, Swarovski, Timberland and Lacoste.
In March this year, Global Fashion Group (GFG) had infused additional $20 Mn into Jabong, to keep it afloat for one more year, while carrying out negotiations for sale with other parties. This is further estimated to touch Rs 72,639 crore by end of 2016.
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Its net revenue rose 7.1 per cent to Rs 869.1 crore in 2015 compared with Rs 811.4 crore in 2014.
