Jabong, the Indian fashion, and lifestyle e-commerce portal, may soon cease to exist to be an independent brand as Walmart-owned Flipkart has reportedly been diverting the shoppers to its own e-commerce firm Myntra, said a media report.
Flipkart reportedly slashed a chunk of its marketing expenditure on Jabong, and has been giving incentives to users to move from the Jabong app to Myntra on its homepage over the past few months, said a report in The Economic Times.
Jabong’s web traffic claimed to have declined to 2.5 million in June from 7.5 million in January this year while traffic to Myntra during the same period remained unchanged at 30 million, the report said citing data from SimilarWeb, which tracks web analytics for businesses.
In July 2016, Flipkart's Bengaluru-headquartered fashion e-commerce company Myntra had acquired Jabong for $70 million.
"Global Fashion Group (GFG) has entered into a definitive agreement to sell Jabong, its Indian business, to Flipkart Group for US$70 million in cash. The transaction is a decisive step in GFG’s strategy to refocus its business on core markets and further accelerate its path to profitability," a press release on the website of Global Fashion Group, the parent company of Jabong, had said.
With net revenues of €126 million and adjusted EBITDA loss of €56 million for the 12-months ended 31 March 2016, Jabong represented 13 percent of Global Fashion Group's net revenue and 22 percent of adjusted EBITDA loss.
Explaining the rationale behind the sale, Global Fashion Group, which was formed in 2014 by merging six e-commerce companies, said that its board has concluded that Jabong’s position in India "would be best served through a business combination with a local player".
In January this year, Myntra-and Jabong CEO Ananth Narayanan had quit, a development that ended months of speculation about his exit following a recent re-jig at its parent group Flipkart, and Amar Nagaram was named as head of these two fashion companies.
Updated Date: Jul 12, 2019 13:23:36 IST