Flipkart-owned Myntra buys Jabong for $70 mn in all-cash deal
While Myntra will benefit from Jabong’s stronghold in categories like women’s apparel, the transaction will allow GFG to “refocus its business on core markets”. The transaction is subject to customary closing conditions and is expected to close during the third quarter. Other firms like Snapdeal, Future Group and Aditya Birla-owned Abof were also in fray to acquire Jabong. “Fashion and lifestyle is one of the biggest drivers of e-commerce 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.
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 December 2014 and December 2015. This is further estimated to touch Rs 72,639 crore by end of 2016. Speaking to PTI, Myntra CEO Ananth Narayanan said there are no plans of integrating the businesses yet. “Jabong has a lot of strengths. It gets 4 million monthly users, has many international brands. We will look at growing both the businesses and leverage capabilities,” he said. Narayanan added there were certain segments like women’s apparel and certain geographies where Jabong has a strong presence in.
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.
Jabong has over 1,500 international high-street brands, sports labels, Indian ethnic and designer labels from more than a thousand sellers. Some 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. GFG said it reviewed multiple options over a period of several months and decided to sell Jabong to Flipkart Group for $70 million in cash.