Flipkart to run Jabong as a separate unit; not to merge with Myntra in near-future

Myntra recently acquired Jabong in a $70 million deal, and the Flipkart-Myntra-Jabong combine became numero uno group in the online fashion space. And since both Mytra and Jabong cater in the same segment, it was wildly anticipated that Flipkart will shut down Jabong and continue with a single entity. However, the firm has now clarified that both Myntra and Jabong will continue to grow as separate entities in future since the customer overlap between the two firms is only 25%. Analysts tracking the space said that “Jabong acquisition has allowed Flipkart Group to boost its GMV. The company will not shut down Jabong immediately as it may end up losing customers to Amazon India, especially during the festive quarter”. Though in the longer term, the technology and suppy chain of Jabong is expected to get merged with Myntra for generating economies of scale.

Jabong is showing an improvement in its performance after being acquired by Flipkart. According to Flipkart sources, October was the first time in six months that Jabong grew 12% year on year. They also added that optimizing supply chain and marketing costs, reducing discounting and the push to launch Myntra private labels on the Jabong platform has helped the portal grow.

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