The long saga of Jabong acquisition has finally come to an end with Flipkart’s fashion unit Myntra closing it and becoming India’s biggest fashion destination.
The deal was a three horse race earlier with online retailer Snapdeal, Aditya Birla Group’s fashion portal abof.com and e-commerce marketplace Flipkart. Leading the talks was Kinnevik chief executive Lorenzo Grabau.
Ananth Narayanan, the CEO of Myntra said, “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 e-commerce in India.”
Since the inception of 2016, it was crystal clear that the German group, Rocket Internet was trying to exit its India businesses for a while. With owners AB Kinnevik and Rocket Internet reluctant to pour in more investments, online fashion retailer, Jabong had expedited its sales process.
This acquisition will strengthen Flipkart Group’s position in Fashion and Lifestyle segment to compete with Amazon Fashion in India. With this, some global brands such as Dorothy Perkins, Topshop, Tom Tailor, G Star Raw will be exclusive to both the platforms.
Binny Bansal, CEO and Co-Founder, Flipkart, said in a statement, “Fashion and lifestyle is one of the biggest drivers of e-commerce growth in India. We have always believed in the fashion and lifestyle segment and Myntra’s strong performance has reinforced this faith. This acquisition is a continuation of the group’s journey to transform commerce in India.”
Myntra is also reportedly delisting around 200 brands, or about 10 percent of its fashion offerings, from its platform due to low sales and is focusing on larger brands with higher traction.
According to a source, who said on condition of anonymity, “Myntra has a long tail of small brands that are not contributing much in terms of sales. They will focus on bigger brands that will bring more business. The smaller brands take away your bandwidth, and even if you are not paying for the stocks, you have to have a team managing them.”