Jabong targets profitability with GFG

Ecommerce platform Jabong is looking at increasing its profitability. ET reports that Jabong is planning to improve its product offerings, increase margins, and create private labels to achieve this. Jabong had recently integrated with the Global Fashion Group (GFG). Set up in 2011, GFG is an international marketplace that aims at bringing together online fashion across the globe.

Jabong is planning to leverage its association with GFG to propel its growth and increase its profitability. Its inclusion in GFG will also help solidify Jabong’s international visibility. GFG has included five companies from different parts of the world in its venture. It is active across twenty seven countries.

GFG the stairway to Jabong’s success?

Jabong’s GMV has increased by almost 200%, at Rs. 1,321 crores. Parallel to this, its losses have also gone up at Rs. 160 crores. With the inclusion in GFG, it is looking at moving up the progress ladder in the next six months.

As of now, Jabong features close to twenty five international brands on its website. As a member of GFG, it can have much better visibility in the international fashion front, and add more foreign brands to its kitty. Global visibility will also help give a boost to the sale of its own brands. GFG has plans to have a supply chain to connect the brands of the five firms that are a part of its group.

Jabong hopes that an increase in demand from global shoppers will help improve its production. The report quotes founder and Managing Director, Praveen Sinha, who feels that it will give a boost to the back-end production. He says that the association with GFG is a strategic move in improving Jabong’s growth.

The focus shifting to profits

The trend for e-taliers now is to look at increasing the profits. Recently, IOS carried a story on how Myntra was looking at bettering its profits by asking more discounts from its sellers. The article explored how vendors were being arm wrestled into giving out more discounts, or face the axe.Myntra also spoke about how it planned to attain break even, and bring down its heavy discounting strategy. Similarly, Snapdeal, in its quest to improve its profits, plans to develop a services platform, where it takes care of utility payments for its users.

Ecommerce sites have possibly figured out that it will not be possible to survive only on popularity. Clearly, the huge losses are speaking for themselves. While GMV has so far been in the spotlight, monetary profits are slowly inching into the scene.Online sellers will have to look sharp and look at minimising their losses in order to remain afloat.