In a strategic move, Flipkart owned Myntra has bought over Jabong in a deal that is valued at almost $70 million. Flipkart has beaten the likes of Snapdeal, Future Group, Aditya Birla Group and Amazon in this buy.
On the face of it, the deal is working for everyone -- it consolidates Flipkart`s position as the leading ecommerce player in India. Global Fashion Group (GFG), which owns Jabong, has been looking for a buyer for Jabong for a while now. The deal will give a much needed shot in the arm to the fashion etail brand.
“Fashion and lifestyle are one of the biggest drivers of ecommerce growth in India. We have always believed in this segment and Myntra’s strong performance has reinforced this faith,” said Binny Bansal, co-founder of Flipkart.
“This acquisition is a continuation of the group’s journey to transform commerce in India. I am happy that we will now be able to offer to millions of customers a wide variety of styles, products and a broad assortment of global as well as Indian brands,” he added.
Jabong, which was once a dominant player in the ecommerce ecosystem in India, has been struggling for some time now. It has had leadership crisis, market share loss and funding crunch among other issues – to the extent that the site was near written off in water cooler conversations.
Earlier today, Sanjeev Mohanty wrote a letter to all Jabong employees and informed that he will be stepping down and will be replaced by Ananth Narayanan, an oldJabong hand.
In a letter which is address to employees, Sanjeev Mohanty told all the employees that they should remember this day as this as the “birthing of a giant”.
Bwdisrupt reproduces the letter of Mr. Sanjeev Mohanty – Dear Team,
This morning, our board has announced that Global Fashion Group has signed an agreement to sell Jabong to Flipkart/Myntra. As a consequence, we will transition from being a GFG owned subsidiary to being a Flipkart owned subsidiary, the same way Flipkart owns Myntra.
Firstly, I would like to thank all of you for all your commitment, hard work and passion in getting Jabong to where it is today.
Starting from a clear strategic direction, moving to a more premium positioning, to improvement in operations and delivering better than the budget bottom line , launching new app versions, strong improvement in brand relations and commercial terms , savings in fulfilment costs, growth of market place , an edgy and fashion forward brand campaign , strong exclusive brand launches, improvement in app conversion and last but not the least , one the biggest milestones being the launch of Seller Centre
I think that it is quite a remarkable list in a very short time span.
As we change ownership, our plan is to continue to run Jabong the way we have in the last 9 months and do what we believe is best for our brand, our culture, and our business. Jabong is unique in its own way, a very strong brand affinity with women consumers, strong portfolio of international brands , a very high NPS score reflecting strong customer service and loyalty, a fashion forward positioning , a very strong sports vertical with unique and exclusive properties. These complement Myntra's strengths in a very unique manner.
At the same time we will be able to benefit from Flipkart and Myntra's support and continuous funding. We have a unique opportunity to benefit from their knowhow and expertise in technology and product, especially in mobile, operational and commercial relationships, whether it is on the logistics and order fulfilment or a strong synergy and leverage opportunity around commercial terms with brand partners or a unique opportunity to list Myntra's strong private labels on Jabong. These are few of the apparent and clear opportunities.
I am very excited to see the company through this historic moment and the fact that with this strategic realignment, we are already on our way to create fashion e commerce history which will not have any close parallel in India. I would like to remember this day as the " birthing of a giant".
I would also like to let you know that today, I will be stepping down as the CEO & Managing Director of Jabong while I will continue to help in the transition process till mid September.
Ananth Narayanan will be stepping in immediately , as the CEO of Jabong in addition to being the CEO of Myntra. You will see that he is an outstanding , capable and visionary leader who has already taken Myntra to new heights of success in a very short span of time.
The CEO of Global Fashion Group, Romain Voog wanted me to share the following words with you: "In this special day, I want to thank the entire Jabong employees, the Jabong leadership team and Sanjeev for their tremendous work and achievement in the last 9 months. The progress made on brand relationship, buying, merchandising and marketing have further strengthen Jabong as a leading fashion destination in India. With this merger, Jabong has a unique opportunity to benefit from the strength and support of Flipkart and Myntra and to keep on developing Jabong unique customer offering”.
For me, the last 9 months were an incredible journey and I'm very excited and happy about the future prospects of Jabong.
Godspeed!
(We will let you about a Townhall which be organised where we can all hear Ananth and me address all of you and also you can have the opportunity to have an open Q&A session with both of us )
Thanking You & Best Regards,
Sanjeev Mohanty
CEO & Managing DirectorIt is to be seen how this deal and acquisition shapes up for Flipkart and for whom the Jabong deal is another step forward in right direction.
