In a bid to further consolidate its position as the undisputed e-commerce market leader in India, Flipkart Ltd has acquired online fashion portal Jabong through its online fashion marketplace Myntra.
The deal values Jabong at $70 million (Rs.470 cr approx.) and Flipkart has agreed to pay all cash, according to a statement by Global Fashion Group, which owns Jabong.
Jabong was believed to have been in talks for an acquisition since the past couple of years. According to reports, the likes of Amazon India, Paytm, Snapdeal, Future Group and Aditya Birla-owned Abof were believed to have shown some interest in buying Jabong. However, Flipkart pipped its other rivals in fray for the acquisition, a move that will place it suitably to compete with Amazon Fashion in India.
“The acquisition of Jabong is a natural step in our journey to be India’s largest fashion platform. We see significant synergies between the two companies especially on brand relationships and consumer experience.” He added, “We look forward to working with the talented Jabong team to shape the future of fashion and lifestyle ecommerce in India,” said Ananth Narayanan, CEO, Myntra.
Moments after the announcement, Flipkart chairman Sachin Bansal tweeted, “Welcome @JabongIndia to the @Flipkart family. We’ll create history together.”
TAbout two years ago, Flipkart bought Myntra for $300 million.
Jabong, which matched larger rival Myntra in sales until 2014, was losing its footing as due to Flipkart’s huge spends on advertisements and discounts to lure customers.
Jabong, owned by Global Fashion Group (GFG), was founded in 2012 and recently managed to cut down its losses from Rs 159.5 crore in 2014 to Rs 46.7 crore in 2015.
Myntra and Jabong are all set to take the next generation of online shopping by storm with a combined base of 15 million monthly active users and offering the best of brands to Indian consumers. Some of the iconic global brands include Dorothy Perkins, Topshop, Tom Tailor, G Star Raw, Bugatti Shoes, Forever 21, The North Face, Swarovski, Timberland and Lacoste and more.