Indian etailer Flipkart has secured apparel group Jabong in a discounted deal through its Myntra unit that looks set to bolster its product diversity and bring under its wing, a new prospectus of customers.
Flipkart, founded in 2007, is a homegrown ecommerce giant and is looking to combat foreign intrusion from both Amazon and Alibaba, reportedly beating rival Snapdeal to the $70m acquisition.
Global Fashion Group has been trying to sell Jabong for a year as its value collapsed despite matching the sales of competitor Myntra. It is set to finalise the all-cash deal by Q3 2016.
Binny Bansal, the chief executive and co-founder of Flipkart, announced the purchase.
— binnybansal (@binnybansal) July 26, 2016
In a statement he added: “Fashion and lifestyle is one of the biggest drivers of e-commerce growth in India. We have always believed in the fashion and lifestyle segment and Myntra’s strong performance has reinforced this faith."
He continued: “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.”
Ananth Narayanan, chief executive, Myntra, said: “Jabong has built a strong brand that is synonymous with fashion, a loyal customer base and a unique selection with exclusive global brands. The acquisition of Jabong is a natural step in our journey to be India’s largest fashion platform. We see significant synergies between the two companies, especially on brand relationships and consumer experience.”
Flipkart is valued at $15bn, it is likely the latest acquisition has bloated that figure.