Flipkart, India’s leading e-commerce portal has acquired Jabong for $70 million. The purchase has been made through Myntra, which was also bought by Flipkart in 2014. Jabong which mainly deals with fashion and accessories was a competitor of Myntra.
Jabong has been looking for potential buyers for some time. Companies like Snapdeal, Amazon, Aditya Birla Group, Future Group also had an eye on Jabong. With above 1,500 brands and more than 1,50,000 varieties, Jabong is not a small portal. There are more than thousand sellers currently selling through the platform. Jabong gave a good competition to Myntra till the first quarter of 2014, when the latter was bought by Flipkart. Since the acquisition, Myntra sped up in the race strengthened by the huge financial support from Flipkart.
Myntra has officially put out a press release declaring the acquisition. Binny Bansal and Sachin Bansal, the co-founders of Flipkart warmly welcomed Jabong to the Flipkart family through social media. The CEO and Co-founder of Flipkart has conveyed his belief that the fashion and lifestyle play a very important role in the e-commerce platforms in India. He expressed his satisfaction of purchasing the Myntra in 2014, which further motivated him in buying the Jabong.
Flipkart’s journey with Myntra has never been a smooth ride. There have been several ups and downs after Myntra came under the hold of Flipkart. The experiment to turn Myntra into an app-only online fashion portal has been grossly unsuccessful and highly criticized. Flipkart was forced to turn back and reinitiate the website of Myntra within a year.
The inclusion of Jabong in the Flipkart group will strengthen the latter’s place in the fashion and lifestyle division of the e-commerce in India. This should place Flipkart ahead of opponents like Amazon, Snapdeal, Abof, etc. with the increased customer base, number of sellers and variety of items. Myntra’s CEO, Ananth Narayanan said –
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.
The acquisition strangely takes place shortly after the departure of Mukesh Bansal, the founder of Myntra from Flipkart. Mukesh left this year in the month of March after spending two years being attached to Flipkart.
Jabong’s acquisition also comes around the same time Amazon launched its Prime facility in India. Flipkart already has Flipkart First, which competes with the Prime of Amazon. Both provide free shipping and other benefits to priority customers.