Snapdeal acquiring Jabong seemed like such a sure shot deal. But alas, the etailer haslost out yet again to its ecommerce rival Flipkart! Flipkart’s online fashion conquest, Myntra, is very likely to acquire its competitor Jabong. Word from sources with knowledge of the matter revealed, both fashion etailers, Myntra and Jabong, have signed a definitive agreement for a deal.
The founders of Flipkart have confirmed the deal through welcome tweets to Jabong.
Jabong is a loss making online retail portal. Losses in 2015, were valued at Rs. 869.1 crore and its biggest investor Rocket Internet can’t wait to get the company off its hands. Sales have dropped drastically over the past year and changes in management didn’t really help at the time.
In February this year, Future Group was expected to take over FabFurnish and Jabong however the retail group showed lack of interest in the fashion portal back then. It finally acquired FabFurnish in April while Jabong was left with no taker.
But now, everyone wants to own Jabong. The ecommerce firm met with Snapdeal, Flipkart, Abof (by Aditya Birla) and even the Future Group and all of them showed deep interest in acquisition.
The reason for this could be because the ecommerce company has managed to bring down its losses. Jabong has a well thought out plan to cut costs and boost revenue, Indian Online Seller reported this month. By the end of May, Jabong managed to increase its revenue by 14%, which is a promising sign so far.
The Flipkart-Myntra combo is doing pretty swell. With Jabong under Snapdeal, the etailer could quite possibly create the same impact. However, it appears that Flipkart doesn’t want to take chances. Also acquiring Jabong means Myntra has one less competitor to deal with doesn’t it?
Myntra’s Chief Executive, said Ananth Narayanan 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.”