Flipkart's Myntra Buys Jabong For USD 70 Mn
In what appears to be part of a continued spell of consolidation in the online retail space, Myntra, the company owned by e-tailing giant Flipkart, reportedly acquired rival brand Jabong from Global Fashion Group at USD 70 million, published media reports have said.
In 2014, Flipkart had acquired Myntra for nearly USD 300 million, giving it a combined customer base of 15 million monthly active users. With the acquisition of Jabong, Flipkart has further consolidated its position as the undisputed leader in fashion and lifestyle segment of India, a spokesperson for Myntra was quoted as saying Live Mint (Read the report here).
Jabong was Myntra’s major competitor initially but slipped following the latter’s acquisition by Flipkart. The Bangalore-based online retail giant spent heavily to acquire more customers through frequent discounts.
In a statement, Flipkart CEO Binny Bansal described fashion and lifestyle as the greatest drivers of e-commerce growth in India and said Myntra’s acquisition of Jabong was “a continuation of the group’s journey to transform commerce in India.”
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On the recent acquisition, Sandy Shen, Research Director at Gartner, told CXOToday, “Fashion (especially women’s fashion) is a top category on e-commerce platforms in terms of transaction volume and growth, and also one of the most competitive due to the presence of lots of brands and manufacturers. The acquisition of fashion platforms is a move for Flipkart to not only further penetrate into the red-hot category but also maintain its leadership position in the market and keep Amazon at bay.”
“We expect major players to keep acquiring niche and smaller players to expand into more product categories, demographics and geographies, and add new functionalities to their offerings,” he added.
Some of the global brands that will be exclusive to both the platforms include Dorothy Perkins, Topshop, Tom Tailor, G Raw Star, Bugatti Shoes, The North Face, Forever 21, Swarovski, Timberland and Lacoste.
In a statement, Myntra CEO Ananth Narayanan said that the purpose of the acquisition was to shape the future of fashion and lifestyle e-commerce in India, as both Jabong and Myntra have similarities when it comes to brand relationship and consumers.
It is interesting to note that online fashion is emerging as the fastest growing category in India’s booming e-commerce market, backed by strong technology and marketing dexterity. According to a Google research, by 2020, India is expected to generate USD 100 billion online retail revenue out of which USD 35 billion will come from fashion e-commerce. This would mean that the online apparel sales are set to grow four times in the next four years to contribute significantly to the burgeoning e-commerce growth.
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