Flipkart has closed all the operations of Jabong, over four years after acquiring it for $70 million. With this move, the Walmart-owned company aims to shift focus completely on its premium fashion platform Myntra for its apparel business.
Now, Flipkart is going to redirect Jabong's flagship portal and its app to Myntra's shopping window. The move will be helping the company in consolidating operations and making its marketing budget efficient.
The e-commerce firm had acquired Jabong for $70 million in 2016 but has since been finding it difficult to work out a conclusive long-term strategy for the fashion portal.
Devangshu Dutta, Founder of Third Eyesight, a strategy consulting firm, said, “The way e-commerce 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; given how Walmart’s focus as a business is fairly cost and efficiency conscious, it makes sense to consolidate operations.”
Indian clothing market
In India, the clothing market will be worth $59.3 billion in 2022, making it the sixth largest globally, comparable to the United Kingdom and Germany. The online accounts for less than 10% of organised apparel retailing with Flipkart, which bought Myntra in 2014 and Jabong two years later, controlling about 70% of the market.
As per SimilarWeb, app downloads of Jabong had dropped by 12.71% in India in December from November in 2019. The usage on the app had been steadily declining as well, while daily active users on Jabong were down by 10.61% in the same period.
On the other hand, Myntra app saw a 41.18% rise in downloads and daily active user count was up by 31.87%.
Women’s apparel market in India
In India, women’s apparel market is estimated to be Rs 150,000 crore in FY-20. The overall women’s ethnic wear category is growing at a CAGR of 60%.
About two-thirds of Myntra’s turnover comes from apparel, its single biggest category. This is followed by footwear, accessories and recent addition in kids and personal care. Women’s wear contributes to 35% of total platform sales on the platform.
The premium ethnic wear on Myntra’s platform has grown at 300% over the past year. The wedding wear’s demand is increasing and will likely contribute about 10% of ethnic wear revenue by next fiscal. The growth in demand for ethnic wear was a key driver to further premiumise its offering.