Jabong is taking a page out of Myntra’s playbook. Just like Myntra did in July, the etailer is getting rid of non-performing online sellers. Myntra is rumoured to have removed about 200 brands from its online platform. Now, it’s time for on its fashion acquisition Jabong, to do the same.
Invoking clause 18.3 to terminate seller contracts
The online fashion portal is run by Novarris Fashion Trading Private Limited, which emailed sellers the following:
“This is in reference to the Marketplace Seller Agreement executed between Novarris Fashion Trading Private Limited and your company/ partnership firm/ sole proprietorship.
Pursuant to Clause 18.3 (Term and Termination) of the Agreement, we regretfully inform you that we are constrained to terminate the Agreement by serving this requisite written notice in advance as per our mutual understanding under the said Clause 18.3.
Accordingly, the Agreement shall cease and stand terminated on the expiry of thirtieth (30th) day from the date of serving this written notice in accordance with Clauses 18.3 of the Agreement.”
Sellers who received this email have been informed that post 15th February 2017 the final settlement will be complete.
Cause for termination
It appears that Jabong is terminating contracts with online sellers based on business metrics. These require sellers to make sales above two lakhs per month. So, the sellers with non-performing SKUs which do not meet this requirement will be delisted from the platform, revealed a source aware of the situation.
Jabong’s performance so far
Before Flipkart’s Myntra acquired Jabong, it was suffering from misfortune and losses. But now the etailer has shown major improvements. Jabong saw a 50% increase in its net revenue just last month. The company’s CEO Ananth Narayan said that the company is back on track, margins are looking good and consumer experiences have improved too.
Cutting off non-performers could help the etailer inch closer to profitability. What do you think?