Flipkart-Jabong deal: 10 things to know
A well-known brand in the Indian online fashion landscape, Jabong has been facing rough weather since the past few months.
In March this year, its owner Global Fashion Group (GFG) reportedly injected additional funds into the company to keep it afloat. Here are some key details about the deal.
2.Flipkart co-founder: Will create history together
Flipkart co-founder Sachin Bansal confirmed the news by welcoming Jabong India to the Flipkart family through a tweet.
3.Valued at $70 million
Flipkart has acquired Jabong through its Myntra unit in a deal that reportedly values the fashion e-tailer at $70 million.
4.Others in the fray
Flipkart pipped several companies including Snapdeal, Future Group and Aditya Birla-owned Abof to seal the deal with Jabong.
5.To get exclusive brands
With this, Myntra will now become the exclusive online platform for international brands like Dorothy Perkins, Topshop, Tom Tailor, G Star Raw, Bugatti Shoes, The North Face, Forever 21, Swarovski, Timberland and Lacoste in India.
6.Access to 15 million monthly active users
Courtesy of its Jabong acquisition, Myntra will now have access to a combined base of 15 million monthly active users.
7.Myntra-Jabong merger signals consolidation
According to analysts, the merger signals a major consolidation phase that beckons the Indian e-commerce industry.
The industry is likely to feel the tremors of the incoming consolidation in the coming months.
8.Got almost sold to Amazon in 2015
Incidentally, Jabong almost got sold to Flipkart’s arch-rival Amazon in 2015.
According to a report by news website VCCircle, Amazon held talks with Jabong’s management.
However, the same fell through due to a valuation mismatch.
9.May reduce price wars
Analysts believe that the acquisition may lead to drop in the discounts frenzy offered by online shopping portals.
With Myntra buying one of its closest competitors, the company may not need to get into price wars to acquire customers. With the acquisition, Myntra now has one less strong competitor to deal with. This may also help Myntra in saving some marketing and advertising costs.
10.Plan to run Jabong as an independent company
In an interview, Myntra CEO Ananth Narayanan said, “We intend to keep Jabong as an independent company.