Myntra CEO: Jabong purchase paid off

According to Myntra’s CEO, after acquiring Jabong in 2016, the e-commerce fashion business has had many positive results.

Myntra and Jabong now account for between 40 and 42 percent of the market in online fashion - Myntra- Facebook

The CEO of Myntra, Ananth Narayanan, told Varsha Bansal of the Economic Times that his decision to acquire another fashion e-commerce portal, Jabong, has so far proved to be a success, despite his initial reservations. “The decision to acquire Jabong was a major turning point in the Myntra-Jabong history,” said Narayanan.

Owned by Flipkart, Myntra is arguably the largest e-commerce portal in India that is dedicated to fashion and beauty. According to Narayanan, the joined forces of Myntra and Jabong now account for between 40 and 42 percent of the market share in the online fashion market. Both businesses are edging closer to profitability. Narayanan credits the Jabong acquisition with making this possible through creating such a large scale operation.

However, it was not an easy decision to acquire Jabong. In 2016, the company had minus 16 percent growth momentum but over the course of just three days, Myntra made the bold decision to take on the company with an investment of 70 million US dollars (approximately 466 crore rupees). “While most people believe that in the e-commerce industry, scale and profitability do not go together, I believe it does,” opined Narayanan.

Acquiring Jabong has allowed Myntra to reduce discounting and optimise the supply chain of both companies. The technology for both companies has also been ameliorated through collaboration. The goal for both companies now is to reach profitability, something that, although tough in the competitive world of Indian online fashion, does seem a real possibility for the near future.

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