Myntra, a company of Flipkart Group, has acquired fashion e-commerce site Jabong Global Group (GFG) for $70 million in cash, creating one of the largest online fashion trends in the country and the largest e-commerce market in India. The acquisition will be arm Flipkart with much needed muscle to take on global rivals Amazon.
Myntra and parent Flipkart together hold 60 per cent stake in the online fashion and lifestyle market in the country. With the acquisition of Jabong, the trio will together command a whopping 75 percent. The deal is crucial to Flipkart fashion and lifestyle category is set to overtake electronics by 2020, according to Google and AT Kearney forecast.
In a statement, Romain Voog, CEO of GFG, which owns Jabong, said: “Through the selling of Jabong, we reach an important milestone in our strategy to focus on and invest in our core markets, which show not only the two major potential for growth and income as a clear and predictable path to profitability. ”
The acquisition is of great importance for Flipkart, said Rajiv Banduni, CEO of GrowthEnabler, a company based in London for online consulting services. “From as Amazon head-on, Flipkart has wisely decided to adopt accompanying strategy ropes in smaller players and build up its base.