Yahoo Finance 
Flipkart is buying online fashion retailer Jabong
BII
This story was delivered to BI Intelligence "E-Commerce Briefing" subscribers. To learn more and subscribe, please click here.
India’s largest e-commerce marketplace Flipkart has agreed to buy fellow India-based online retailer Jabong for $70 million in cash, according to The Business of Fashion.
Jabong, which sells roughly 1,500 high-end international brands, will be combined with Flipkart’s existing online fashion retailer, Myntra. The addition of Jabong makes Flipkart the largest fashion e-commerce business in India, with nearly 15 million active users per month. The deal is expected to be finalized during the third quarter of 2016.
Jabong met with a number of major e-commerce players in India, including Amazon India and Snapdeal, before agreeing to sell to Flipkart. Flipkart’s acquisition of Jabong comes at an opportune time. Jabong was valued at $508 million in 2013, but its value significantly decreased in later years due to leadership issues, lack of funding, and increased competition within the Indian e-commerce industry. However, Jabong is still a household name with a strong customer base in India, which will bolster Flipkart’s fashion e-commerce business.
Flipkart’s acquisition of Jabong is one of several strategic initiatives it has made to stay competitive within India’s growing e-commerce marketplace. It recently announced plans to invest $100 million to build out its digital payments business in order to better compete with Amazon India and Snapdeal, which both offer e-payment solutions.
And Flipkart isn't the only one boosting investments — Amazon is also stepping up its efforts to capture market share in India. Amazon recently invested an additional $3 billion into its e-commerce operations in India, and it just launched its Amazon Prime service in the country. All three major players in this space — Flipkart, Amazon, and Snapdeal — will likely continue to invest in their e-commerce solutions, as more retail dollars go online in the country and competition continues to increase.
To receive stories like this one directly to your inbox every morning, sign up for the E-Commerce Briefing newsletter. Click here to learn more about how you can gain risk-free access today.
See Also:
