Flipkart Ltd has acquired Jabong
through its unit Myntra in a cut-price deal that values the online fashion
store at $70 Million, moving to preserve its position as India’s No 1
e-commerce marketplace in the face of an onslaught by Amazon India. Jabong had
been valued at $508 Million in 2013.
For Flipkart – Myntra, the
acquisition of Jabong will boost sales at a time when Flipkart is struggling to
revive growth and struggling to protect its leadership in a market where Amazon
has made rapid strides. Jabong offers more than 1500 international high street
brands, sports labels, Indian ethnic and designer labels and over 15,000 styles
from more than 1000 sellers.
In September 2014, German 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 GFG.
GFG, which is jointly owned by Rocket Internet and AB Kinnevik, houses the
German e-commerce company’s fashion businesses from emerging countries, including
Jabong, Latin America Dafiti, Russia Lamoda, Namshi in the Middle East and
Zalora in South East Asia and Australia.
Earlier this month, Jabong
expedited its sale process as Kinnevik and Rocket Internet were reluctant to
pump more capital into the company in a gloomy e-commerce market. Jabong, which
matched larger rival Myntra in sales until early 2014, has ceded market share
since then, as Myntra parent Flipkart spent lavishly on advertising and
discounts to lure customers.
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