Myntra, an one of the unit of Flipkart Ltd has acquired Jabong in a cut-price deal that values the online fashion store at $70 million, moving to preserve its position as Indiaâ€™s No.1 e-commerce marketplace in the face of an onslaught by Amazon India.
Flipkart, which beat other Jabong suitors such as Snapdeal, will pay cash for the acquisition, according to a statement by Global Fashion Group (GFG), which owns Jabong.GFG has been looking for a buyer for Jabong for more than a year now. GFG held discussions with several firms, including Snapdeal, Future Group, Aditya Birla Group and Amazon.
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 1,500 international high-street brands, sports labels, Indian ethnic and designer labels and over 150,000 styles from more than 1,000 sellers.â€œJabong has built a strong brand that is synonymous with fashion, a loyal customer base and a unique selection with exclusive global brands. The acquisition of Jabong is a natural step in our journey to be Indiaâ€™s largest fashion platform. We see significant synergies between the two companies, especially on brand relationships and consumer experience,â€ said Ananth Narayanan, chief executive, Myntra.
GFG, which is jointly owned by Rocket Internet and AB Kinnevik, houses the German e-commerce companyâ€™s fashion businesses from emerging countries, including Jabong, Latin Americaâ€™s Dafiti, Russiaâ€™s 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.