Consolidating its position in the competitive online fashion market in India, Rocket internet funded Jabong has joined hands with four other leading fashion e-commerce businesses present across 23 countries to become a part of what will be known as the ‘Global Fashion Group’.
The agreement means consumers will enjoy greater choices in assortment with varied price points adding to their shopping experience. “The local brand identity of Jabong will be the same. This tie up will give us access to more brands and private labels through common sourcing,” said Praveen Sinha, CEO & Founder, Jabong. There will also be a lot of knowledge sharing on IT competence and other local innovations like cash on delivery in India,” he said.
Dafiti (present in Brazil), Lamoda (Russia), Namshi (West Asia), Zalora (South East Asia & Australia) are the four other leading online fashion portals that have come together with Jabong. These five fashion portals together have 4.6 million active customers and generated 463 million euros of Gross Merchandise Volume annually. The combined entity is valued at $ 2.7 billion (around Rs 21,600 crore) as per the last funding rounds of all five companies, according to a statement by Kennevik.
Kinnevik, Rocket internet and Access Industries together have a share of about 56% in the newly formed Global Fashion Group.
While the booming e-commerce market in India is abuzz with talks of mergers, buy-outs and fund raising, experts say that the move by Jabong vouches for its strong individual identity, long term sustainability through a pool of investors with deep pockets.
Though the five GFG companies will continue to be led by their respective founders and management teams a central leadership team will soon be formed to pursue global strategy in the online fashion space. Later a restructuring process will be undertaken through equity swap to form GFG, said sources close to the development.
Flipkart’s $ 1-billion fundraising followed by Amazon’s $ 2-billion investment announcement had put all eyes on leading competitors like aggregate player Snapdeal and fashion portal Jabong.
Fashion with high margins and exponential growth rate is the most sought after category in the e-commerce space. Flipkart acquired fashion portal Myntra earlier this year to expand into the fashion category and has been tapping the local markets of handlooms through various partnerships with Ministry of Textile and Federation of Indian Micro, Small and Medium enterprises (FISME). American giant Amazon has similar plans. For Snapdeal the category contributes about 60% of their overall volume.