Myntra has now acquired Jabong at an undisclosed price from Global Fashion Group, with an aim of becoming the biggest fashion shopping destination in India. The main competitors against Myntra, in the race to acquire Jabong were Kishore Biyani’s Future Group, Snapdeal, Alibaba and a few others.
What the owners of Myntra and Flipkart have to say
Myntra is owned by Flipkart since 2014, and now Myntra has taken the step of acquiring Jabong which will further strengthen the parent company and its position in the market of e-commerce. The co-founder of Flipkart, Sachin Bansal, announced the news of accusation through a tweet, where he welcomes Jabong to the Flipkart family.
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A statement from Myntra stated that Jabong is a major fashion multi-brand e-store which has a variety of Indian ethnic brands, sportswear brands, international high street brands and other designer labels. Also Jabong has a strong set of loyal customers. So the accusation of such a company would be of great benefit to the Flipkart Group. The CEO of Myntra, Ananth Narayanan, said that with this acquisition the two companies would work together in order to improve brand relationships and customer experience, and then go on to become the biggest in fashion and lifestyle e-commerce industry.
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The valuation of the deal has not been revealed but according to Mint the valuation of Jabong could have been around USD 100-150 million. But both the companies did not give any details about it. In 2014 Myntra was acquired by Flipkart in a deal of Rs2000 crore.
Reason of the sale
Jabong has been in an unstable position for the past one year due to changes in the company’s management and lowering sales. The news about Jabong being for sale came up when report showed that the owner of Jabong, AB Kinnevik and Rocket Internet were not keen on putting more money into Jabong. So they started the discussion of sale with companies like Future Group, Snapdeal, Aditya Birla owned Adof and of course Myntra.
Since 2014 Jabong has been looking for buyers. In the year 2015 the company was almost sold off to Amazon, but did not due to some valuation problem.
Experts are of the view that this takeover by Myntra is aimed towards building a stronger presence in the market which is now becoming competitive. Offline brands like Abof, Reliance Ajio, Now, Tata Cliq are entering the e-commerce market with an omni-channel strategy, which is of competition to Myntra and Flipkart.
Future plans of the two companies
But with this acquisition, Myntra and Jabong are all set on working together and to shape up the future of e-shopping in India. They together have an active user base of 15 million, which they wish to expand further. Now these two brands will have some of the most exclusive brands like Dorothy Perkins, Tom Tailor, Topshop, G Star Raw, The North Face, Bugatti, Swarovski, Lacoste, Timberland and Forever 21 selling exclusively at these two online stores. Flipkart on a whole would focus on providing a better platform for customers for buying a variety of stylish products of both Indian and global brands.