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Myntra acquires Jabong in $70 million ‘discount’ deal

Update On :27 July 2016

Myntra acquires Jabong in $70 million ‘discount’ deal

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 India’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.“Jabong 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 India’s largest fashion platform. We see significant synergies between the two companies, especially on brand relationships and consumer experience,” said Ananth Narayanan, chief executive, Myntra.

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’s Dafiti, Russia’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.

News Source From : http://www.livemint.com/Companies/iicvIYFijqp9VRAx0ON46I/Flipkarts-Myntra-acquires-Jabong.html

Image Courtesy : http://cdn.ndtv.com/tech/images/gadgets/jabong_pages.jpg

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