New Delhi: On Tuesday, Flipkart-owned Myntra said it has acquired Jabong from Global Fashion Group for an undisclosed amount, a move that will mark further consolidation in India's booming e-commerce industry.
Myntra, which itself was acquired by Flipkart in 2014 in an estimated Rs 2,000 crore deal, will have access to a combined base of 15 million monthly active users. No financial details were disclosed.
"The acquisition of Jabong further strengthens Flipkart Group's position as the undisputed leader in Fashion and Lifestyle segment in India. Jabong is among India's major fashion multi-brand e-store with more than 1,500 on-trend international high-street brands, sports labels, Indian ethnic and designer labels and over 1,50,000 styles from over a thousand sellers," Myntra said in a statement.
No official statement was available from Jabong. Some of global brands that will be exclusive to both the platforms include Dorothy Perkins, Topshop, Tom Tailor, G Raw Star, Bugatti Shoes, The North Face, Forever 21, Swarovski, Timberland and Lacoste.
"Fashion and lifestyle is one of the biggest drivers of ecommerce growth in India. We have always believed in fashion and lifestyle segment and Myntra's strong performance has reinforced this faith," Flipkart CEO and co-founder Binny Bansal said.
This acquisition is a continuation of the group's journey to transform commerce in India, he added. "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. We look forward to working with the talented Jabong team to shape the future of fashion and lifestyle ecommerce in India," Myntra CEO Ananth Narayanan said.
Jabong has been in the market for a sell-off and was in discussion with companies including Future Group, Snapdeal and Aditya Birla-owned Abof among others. Jabong was founded in 2012.
In September 2014, its investor, Rocket Internet merged Jabong with four other online fashion retailers in Latin America, Russia, the Middle East, South-east Asia and Australia to create Global Fashion Group (GFG).
Swedish investment firm Kinnevik also owns a large stake in Jabong's parent Global Fashion Group. While Jabong has managed to reduce losses by reducing discounts, both Kinnevik and Rocket Internet seem unwilling to infuse fresh capital and are believed to be keen to exit.
In April this year, GFG raised fresh funding from existing investors at a lower valuation, raising 300 million euros from Rocket Internet and Kinnevik. Post the last round, GFG was valued at 1 billion euros, a csignificant fall from earlier valuation of 3.1 billion euros.
According to the Internet and Mobile Association of India, e-tailing has grown at 57 per cent year-on-year, moving from Rs 24,046 crore to Rs 37,689 crore between the December 2014 and December 2015. This is further estimated to touch Rs 72,639 crore by end of 2016.
As per a Rocket Internet investor presentation, Jabong had a net revenue of 32.6 million euros in Q1 2016, up 14 per cent from 28.6 million euros in the year-ago period. For FY2015, its revenues were at 122.1 million euros.
