Jabong…Add to the cart! In what came as a shocking news Flipkart’s Myntra has acquired the famous fashion and lifestyle e-store Jabong. While there was no official confirmation for the consideration involved, the acquisition number as per the press release by Jabong’s parent company Global Fashion Group is said to be around $70 million.
Global Fashion Group also stated that the initiative was aimed towards increasing profitability and refocus of their business in the core markets.
Social media went ballistic after the tweets were posted by Sachin Bansal, Executive Chairman, Flipkart. He tweeted, “Welcome @JabongIndia to the @Flipkart family. We’ll create history together”.
Many industry pundits believe the acquisition will help Flipkart become the leader in online fashion and the lifestyle retail domain. Many also feel that industry giants Amazon, Snapdeal will face stiff competition from Flipkart after this sale.
Jabong, an online retailer website for fashion and lifestyle products that was founded in 2012 has been reportedly suffering huge losses over the years. Media reports have time and again commented that Jabong was not able to compete with contemporaries like Myntra, Snapdeal etc. who are touted for their prompt delivery and highly discounted products.
Rumors of a possible sale were always circulating but nothing concrete ever came out of it. Flipkart purchased Myntra two years ago for 2000 crore, in a similar fashion.
Binny Bansal, CEO, and Co-Founder, Flipkart, stated in the Economic Times, “This acquisition is a continuation of the group’s journey to transform commerce in India.’’
