|Myntra acquires Jabong.|
The Deal was confirmed on Twitter by Flipkart CEO Binny Bansal while Executive Chairman Sachin Bansal keen to ‘Make History’ with Jabong.
— binnybansal (@binnybansal) July 26, 2016
— Sachin Bansal (@_sachinbansal) July 26, 2016
According to a report by India’s Economic Times, Flipkart had competition from a whole host of other e-commerce companies, including Snapdeal and Future Group, But they came up trumps over the rest.
In an announcement released by Global Fashion Group(GFG), Umbrella company that runs Rocket Internet’s Fashion driven e-commerce businesses worldwide, explained the reason to sell Jabong to Flipkart.
Following a strategic review of its Indian operation, the GFG Board concluded that Jabong’s position as India’s leading fashion e-commerce destination would be best served through a business combination with a local player. Having reviewed multiple options over a period of several months, the GFG Board has resolved to sell Jabong to Flipkart Group.
On the financial side of things, Jabong wasn’t particularly doing well. The company had endured a loss of $24M in 2014. Though last year saw a big improvement where the losses decreased drastically to a much more modest figure of $7M, but in an attempt to get the bussiness into shape for a sale, the company started to spend less on discounts due to which both the Revenue and GMV decreased 19% in last quarter.
In a statement, GFG’s CEO Romain Voog said “Through the sale of Jabong, we are achieving a milestone in our strategy to refocus and invest in our core markets that show both, significant growth and revenue potential but also a clear and predictable path to profitability.”