Mumbai, Nov 27: American online retail giant Amazon is planning to buy Indian online fashion retailer Jabong.com. If media reports are to be believed Amazon is in initial-level talks to acquire Jabong.com. This deal is backed by Rocket Internet and could be inked in $1.2 billion.
As per report in VC Circle, a meeting in this regard took place last week. Beside Rocket Internet, Swedish venture capital firm Kinnevik and British development finance firm CDC have stakes in Jabong.com.
Media reports say that Amazon's move is to counter rival Flipkart's acquisition of online fashion retailer Myntra in May this year. Earlier this year, Flipkart acquired Myntra in Rs 1,800-crore stock-and-cash deal.
India's online fashion market is dominated by Flipkart along with Myntra. Both of them control 50 per cent of the market. Jabong controls 25 per cent of the market. Other online retailers like Zovi, Fashionara, Limeroad.com occupy the rest of the market.
According to VCCircle report, if the acquisition deal is struck, Amazon may choose to keep Jabong as a separate entity just like Flikart and Myntra.
Jabong, founded by three entrepreneurs- Lakshmi Potluri, Praveen Sinha, and Arun Chandra Mohan in 2012 was later joined by others like Manu Jain and Mukul Bafana. The company has more than 1000 brands and its annual sales was about US $300 million in the last financial year, calculated by gross merchandise value (GMV).
In 2012-13, Jabong's revenue soared 50 times - to Rs 202 crore from Rs 4 crore the previous year. Jabong had reported a gross merchandise value (GMV) of Rs 509 crore from three million orders in the January-June period of this year. This was a three-fold rise over the previous year.