Shifting its entire focus to Myntra, e-commerce giant Flipkart has sidelined its 2016 acquisition of Jabong. The marketing spends have been reduced towards Jbaong and the site is also being redirected to Myntra. Jabong and Myntra are both fashion specific e-commerce platforms and they have both come under the umbrella of Flipkart.
Myntra was acquired by Flipkart in 2014 after which Myntra acquired Jabong for $70 million in 2016. In 2018, Flipkart merged the two and laid off around 150 employees at the time. After Jabong’s acquisition, the company could not devise a long-term strategy for the portal and with this merge now, they still lead in fashion e-commerce.
There was a non-impairment charge of $290 million taken by Walmart which acquired Flipkart in May 2019 for the trade name of ‘Jabong’ due to its investment in the same.
Indian clothing market would become 6th largest globally by estimated market growth to $59.3 billion by 2022 and the online clothing platforms account less than 10% in organised apparel retailing. At the moment, Flipkart has dominance over 70% of the market.
For Jabong, as per reports, there was already a decline in their business and growth by 12.7% towards the end of 2019, that is November and December specifically. They also recorded a loss of Rs. 22.41 crores in 2019 as compared to Rs. 39.5 crore profit in 2018.
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