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Flipkart shuts down Jabong to focus on Myntra: Report

Flipkart has shut down online fashion store Jabong and is focusing on Myntra, which it acquired in 2014, reported on Wednesday. Two years after being acquired by Flipkart, Myntra had acquired Jabong in a deal estimated to be worth $70 million in July 2016.

5th February 2020 | 02:33 PM (IST)
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Over four years after acquiring Jabong for $70 million, Walmart-owned Flipkart has formally closed its operations to shift focus completely on its premium fashion platform Myntra for its apparel business. As part of the move, Jabong’s flagship portal and app are being redirected to Myntra’s shopping window.

Experts said the move will help Flipkart consolidate operations and make its marketing budget efficient.

“The way ecommerce market in India has developed, customers need to be reacquired consciously. Since the level of stickiness is low, it is better to bring consumers to one site than spread money across multiple sites,” said Devangshu Dutta, founder of Third Eyesight, a strategy consulting firm, adding, “given how Walmart’s focus as a business is fairly cost and efficiency conscious, it makes sense to consolidate operations.”

Myntra did not respond to ET’s queries on official confirmation till press time. In July last year, Flipkart had said that it had begun to cut a bulk of its marketing expenditure on Jabong and redirecting users towards Myntra by offering incentives.

In an earning’s call last November, Walmart reported a non-cash impairment charge of $290 million on account of its investment in Jabong.

The Indian clothing market will be worth $59.3 billion in 2022, making it the sixth largest globally, comparable to the United Kingdom and Germany, according to data from McKinsey’s FashionScope.

However, online accounts for less than 10% of organised apparel retailing with Flipkart that acquired Myntra in 2014 and Jabong two years later, controlling about 70% of the market.

According to data sourced from SimilarWeb, which tracks web analytics for businesses, app downloads of Jabong in India had dropped by 12.71% in December from November in 2019. Usage on the app had been steadily declining as well.

Daily active users on Jabong were down by 10.61% in the same period. Myntra app, on the other hand, saw a 41.18% rise in downloads and daily active user count was up by 31.87%.

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5th February 2020 | 02:33 PM (IST)
42 views
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