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Jabong, the fashion and lifestyle e-commerce portal, 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 more choices and varied price points. “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, founder and chief executive. There will also be a lot of knowledge sharing on information technology and other local innovations like cash on delivery in India, he said. Dafiti (present in Brazil), Lamoda (Russia), Namshi (West Asia), Zalora (Southeast Asia & Australia) are the four other online fashion portals that have come together with Jabong.
These five portals together have 4.6 million active customers and generate €463 million of gross merchandise volume annually. The combined entity is valued at €2.7 billion (Rs 21,600 crore), based on 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 56 per cent in the newly formed Global Fashion Group.
While the booming e-commerce market in India is abuzz with talk of mergers, buyouts and fund raising, experts say the move by Jabong vouches for its strong individual identity and 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 an equity swap to form GFG, said sources.
Flipkart’s $1-bn fundraising, followed by Amazon’s $2-bn investment announcement, had put eyes on leading competitors like aggregate player Snapdeal and Jabong.
Fashion, with high margins and an exponential growth rate, is the most sought category in the e-commerce space. Flipkart acquired fashion portal Myntra earlier this year to expand into the category and has been tapping the local handloom markets through partnerships with the ministry of textiles and the Federation of Indian Micro, Small and Medium Enterprises. American giant Amazon has similar plans. For Snapdeal, the category contributes about 60 per cent of their overall volume.
