The war to dominate the Indian online fashion retail market has just got interesting. India’s largest fashion retailer and Flipkart owned Myntra buys the rival online fashion portal Jabong from Global Fashion Group.
The deal is worth around $70 million (approximately Rs 470 crore) and Flipkart is paying the entire amount in cash. This acquisition will put Myntra in a more competitive and for the time being safeguard its position as India’s largest online fashion retailer.
“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,” commented Ananth Narayanan, CEO, Myntra. “We look forward to working with the talented Jabong team to shape the future of fashion and lifestyle ecommerce in India,” her added.
One should remember that Flipkart paid in excess of $250 million to acquire Myntra two years ago. But soon after the acquisition, Flipkart spearheaded the idea of app-only approach for Myntra. But the whole experiment failed due to pushback from customers. Eventually, Flipkart took a u-turn and relaunched the Myntra desktop and mobile website.
Talking about Jabong, one of India’s leading fashion e-store with more than 1,500 on-trend international brands, sports labels, Indian ethnic and designer labels. The e-store has a collection of over 1,50,000 styles in its marketplace from over a thousand sellers .
Post this acquisition, Myntra, and Jabong will collectively have over 15 million monthly active user base.
So with Myntra buying Jabong we can expect the competition to get more intense between e-commerce players, looking to become the biggest fashion retailer in India. This now includes Amazon India, Snapdeal, AJIO from Reliance Industries, TataCliQ, and Abof from Aditya Birla Group.