One of India’s largest lifestyle online retailer Jabong has crossed the 1,000 crore sales mark in the year doubling its revenue from a year ago. But the deep discounting has led to a threefold hike in the net loss for the company.
Owned by Xerion Retail, Jabong has posted a loss of nearly 43.6 crore on sales of 1,082.9 crores as per a Registrar of Companies filing. Last year, the online retailer managed to nab sales worth 527 crore with a net loss of 16.6 crore. Sales of the company, incorporated four years ago, amount to a third that of Shoppers Stop, India's largest department store chain started 25 years ago.
As per Goldman Sachs, India's ecommerce market is set to rise to $103 billion by FY20 from $26 billion now. High discounting models have no doubt increased the sales for online retailers but also poses years of operating losses, given high initial investments. At the same time, several etailers are said to be getting more circumspect with discounts as they seek to shore up their balance sheets.
Jabong, which was started in a one-room office in Gurgaon, is now part of Global Fashion Group portfolio, a subsidiary of German online business developer Rocket Internet.