E-commerce giant Flipkart concentrates solely on Myntra, overlooking Jabong.
In a strategic move announced in August 2020, Flipkart, India's leading e-commerce giant, decided to dissolve the Jabong brand and integrate its customers and products into Myntra's platform. The integration process was completed by the end of the year.
Both Myntra and Jabong have been under the Flipkart umbrella since 2014 and 2016 respectively, with Myntra being the leading player in fashion e-commerce following the merge. This consolidation comes as Flipkart shifts its focus from Jabong to Myntra, as the former has been experiencing a decline in business.
In 2019, Jabong recorded a loss of Rs. 22.41 crores, a stark contrast to the profit of Rs. 39.5 crores it made in 2018. Despite a growth of 12.7% towards the end of the year (November and December), it was not enough to sustain the business. The merge was conducted due to a lack of a long-term strategy for Jabong.
The Indian clothing market is estimated to grow to $59.3 billion by 2022, making it an attractive sector for e-commerce players. However, online clothing platforms account for less than 10% in organized apparel retailing.
The decision to phase out Jabong has not been without consequences. Walmart, which acquired Flipkart in May 2019, took a non-impairment charge of $290 million for the trade name of 'Jabong'. In 2018, the merger of Myntra and Jabong resulted in around 150 layoffs.
Despite these challenges, Flipkart currently dominates over 70% of the Indian e-commerce market. Myntra, as the leading fashion e-commerce platform, is well-positioned to capitalize on this growth. With its focus now solely on Myntra, Flipkart is poised to shape the future of fashion retailing in India.
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