After Jabong revamped its strategy and improved its GMV under the leadership of CEO Sanjeev Mohanty, we thought that investors will want to stick around. Turns out, the talks with new buyers are still very much alive.
The fashion etailer’s holding company Global Fashion Group (GFG), which is backed by Sweden-based AB Kinnevik and Germany-based Rocket Internet, is in no mood to pour more funds. Hence, in spite of the new & improved performance, the hunt for a new owner continues.
Sources close to the situation said that Snapdeal, Aditya Birla Group (Abof), Future Group and Flipkart are the four potential buyers. AB Kinnevik’s CEO Lorenzo Grabau had a meeting with each firm’s executives during his recent India visit.
Out of all, Snapdeal and Aditya Birla are in the lead to buy Jabong. Flipkart is keen as well to buy rival company of its fashion arm Myntra.
Rocket Internet want to pull out of Jabong, which it once considered as one of the top companies in its portfolio. In April this year, the German group had devalued the fashion etailer. If this deal materializes, then this will be the Internet company’s third exit from India businesses after FabFurnish and Printvenue. Food Panda will be the only company left, which is also struggling.
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On the other hand, Kinnevik was planning to form a strategic partnership with a new investor. But now the Swedish investment firm is looking to sell the company completely, sources revealed.
“Rocket Internet is keen to exit Jabong, while Kinnevik wanted to stay on and find a strategic investor. However, due to a financial crunch, a complete sell-out is more probable now,” said one person close to the situation.
If Aditya Birla buys Jabong, then Myntra will get a new, fierce competitor in form of Abof.com. But if Kunal Bahl bags the deal, then ecommerce leader Flipkart will have to fight against two aggressive players: cash-rich Amazon and Jabong-in-tow Snapdeal.
As for Snapdeal, lately the company is losing its place slowly in the ecommerce market to other players like Amazon and Shopclues. Acquiring Jabong might be the much needed lead the New Delhi-based online marketplace needs to stay in the ecommerce race.
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