Flipkart-owned Myntra acquires fashion and lifestyle site Jabong
Flipkart, on Tuesday, announced that it had acquired Jabong, the country’s second largest online fashion retailer, for an undisclosed amount.
The acquisition was done through Myntra, the largest online fashion retailer that Flipkart bought two years ago.
“Fashion and lifestyle is one of the biggest drivers of e-commerce growth in India. 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.
With their vast market presence, Flipkart will now have access to 15 million active users from Myntra and Jabong together.
“This acquisition is a continuation of the group’s journey to transform commerce in India. I am happy that we will now be able to offer to millions of customers a wide variety of styles, products and a broad assortment of global as well as Indian brands,” Bansal said.
Jabong, promoted by Germany’s Rocket Internet group, a large global incubator of e-commerce firms, had been looking for a buyer. Two years ago, the company was said to be in talks with Amazon and then with Paytm, but they fell through on valuation.
Grapevine has it that Rocket wanted $400 million a couple of years ago. However, sources said the final deal was done at a much lower valuation. Specifics of the takeover have not been revealed yet.
Fashion is the second largest category in India, after electronics, at $16 billion annualised revenues. It makes for almost 30% of e-commerce transactions.
Over the years, Jabong built a loyal customer base and associated with brands not available on other online stores, many of these international brands. At present, it has more than 1,500 brands and 1,50,000 styles. These include high-street fashion, sports, kids wear and Indian ethnic wear. Some of the international labels available on Jabong include Dorothy Perkins, Topshop, Tom Tailor, G Star Raw, Bugatti Shoes, The North Face, Forever 21, Swarovski, Timberland and Lacoste.
A Rocket Internet investor presentation pegged Jabong’s net revenue of the first quarter in 2016 at 32.6 million euros, up 14% from 28.6 million euros in the year-ago period. For FY2015, its revenues were at 122.1 million euros.
According to the Internet and Mobile Association of India, e-tailing has grown at 57% 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.
(With inputs from PTI)