Flipkart gains fashionable edge over Amazon, Snapdeal with Jabong-acquisition

Editor | Sep 09, 2020

Who wouldn’t give a dollar for Snapdeal thoughts after Flipkart snatched Jabong from its hands? From being the front-runner to a straggler, suddenly losing out the deal must be a bitter pill to swallow for Kunal Bahl’s company.

In fact, Flipkart may have killed two birds – Amazon, Snapdeal with one stone – Jabong-acquisition.

Snapdeal blindsided

Industry watchers assumed that the ecommerce world is soon going to get a new strong partnership similar to Flipkart-Myntra. But to everyone’s surprise, Rocket Internet’s fashion portal merged with Bansals’ firm and Kunal Bahl got blindsided.

Reports reveal that while Jabong’s officials were in talks with Snapdeal about the acquisition arrangement, Flipkart directly got in touch with Global Fashion Group, the fashion etailer’s parent company and sealed the deal.

It was Lee Fixel, partner at Tiger Global Management (Flipkart’s largest investor) who encouraged Flipkart’s managers to buy Jabong.

An undisclosed source revealed,

“The price was very attractive and Lee was in favour of picking up Jabong. With Jabong, Flipkart will be out of reach of Amazon for good in at least one category. Lee really pushed for the deal.”

Snapdeal was concerned about the corporate governance violation allegations on Jabong’s ex-manager and wanted to make sure that the company doesn’t get embroiled in a legal probe. Flipkart took advantage of this and grabbed Jabong.

“Speed is very important in the last leg of the cycle, especially when there are multiple people in fray. Snapdeal’s legal team sent a long list of conditions; they were negotiating hard. They were worried about an investigation (into alleged irregularities at Jabong)…, if it happened post the acquisition,” revealed one person close to the development.

Will Flipkart rule the online fashion world?

Most likely.

Fashion and lifestyle is one of the top product categories in ecommerce. Needless to say, etailers give special attention to this segment. Myntra and Jabong were the top two fashion etailers. Koovs and online portals of retail giants Birla, Tata and Reliance too have been fighting for fashion ecommerce share.

Amazon Fashion’s latest 360-degree ad campaign ‘Citizens of Fashion’ with Parispur and Rioganj is hard to miss. The marketplace’s previous campaign ‘Kya Pehnu’ too focused on Amazon’s aim to be recognized as India’s online fashion destination.

With Myntra in its kitty, Flipkart was already a leader in the online fashion industry. It won’t be wrong to assume that Snapdeal which is not a strong e-fashion player was keen on buying Jabong to gain a fashionable advantage like Flipkart and Amazon.

Now that it has landed in Bansals’ lap, the ecommerce leader may reach indomitable form, at least in the e-fashion industry. It will also strengthen its market leadership position, which was in danger because of Amazon India’s rising popularity.

Ananth Narayanan, CEO, Myntra said,

“Jabong has built a strong brand that is synonymous with fashion, a loyal customer base and a unique selection with exclusive global brands. 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.”

Let’s see how Flipkart manages to create separate identity for Jabong. Also, will Amazon dig into its $3 billion to compete with trio Flipkart-Jabong-Myntra on the fashion front? And will Snapdeal wrap up?



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Editor

Editor team is specialized in introducing the marketplace content targeting the Indian online sellers. They plan and coordinate to bring the appealing content for the small businesses on how to partner with the e-commerce sites like Amazon and Flipkart and strategies for improving their online business. 




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