Myntra Unit of Flipkart Acquires the Indian Fashion and Lifestyle e-commerce Platform Jabong

By siliconindia | Thursday, 04 August 2016, 04:52 Hrs

BENGALURU: Rocket internet sells its flagship company Jabong to Flipkart owned Myntra, making it one of the biggest mergers in the ecommerce industry. The combined base of both the companies is expected to be around 15 Mn monthly active users, which will be a major milestone for Flipkart. Here we list out some of the important facts about the Jabong-Flipkart deal.

Founded in 2012, its parent company Rocket Internet integrated Jabong with four other fashion retailers in Russia, Latin America, Asia and Australia to create Global Fashion Group (GFG), in which the Sweden based entrepreneurial investment group Kinnevik AB is also a major share holder.

“The acquisition of Jabong is a natural step in our journey to be India's largest fashion platform,” says Ananth Narayanan, CEO of Myntra. The fashion retailer is reportedly acquired at 70 Mn US dollar and the deal was announced by Sachin Bansal in a tweet that read “Welcome @JabongIndia to the @Flipkart family. We'll create history together.”

According to Rocket Internet investor presentation, Jabong generated net revenue of 33.6 Mn Euros in the first quarter of 2016 and the revenues for the fiscal year 2015 were valued at 122 Mn Euros.

Jabong, a major fashion multi-brand online store with more than 1,500 international brands, sports labels, Indian ethnic and designer labels, was approached by companies such as Snapdeal and Future Group alongside Flipkart. While Snapdeal offered cash-cum-stock transaction, Future Group was interested in an all-cash deal. However their offers were only a fraction on the amount the owners of Jabong had valued it for.

With this acquisition, Myntra will expand its platform by including international brands like Dorothy Perkins, Bugatti Shoes, Forever 21, Timberland and Lacoste in India. As per analysts the merger will have a great impact on the Indian e-commerce industry.