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Finally, Flipkart shuts down Jabong


Flipkart has shut down the operations of Jabong, in a move to fully empower its premium fashion marketplace Myntra. Following the development, Jabong’s portal and the app will redirect to Myntra’s shopping window.

Flipkart had acquired Jabong from Global Fashion Group in a fire sale worth $70 million in 2016. Unlike Myntra, that has been growing fast, Jabong was continuously struggling to scale in terms of sale.

Last month, Jabong’s daily active users dropped by 10.61% with app downloads getting reduced by 12.71%. As the Walmart-owned company has continuously failed to devise any long-term strategy for the portal, it has finally decided to sideline Jabong and help Myntra gain more traction on its platform.

The shutdown of Jabong was evident in June last year when Flipkart had cut down the marketing spend and redirected its users to Myntra with attractive incentives. The acquisition also backfired as Flipkart faced non-cash impairment of $290 million for its investment in Jabong in November last year.

For better coordination and shrink burn rate, Flipkart had integrated Myntra and Jabong in November 2018 across all functions and laid off about 50% off the total workforce.

Till now, Flipkart along with Myntra and Jabong together were holding about 70% market share in online fashion. Its dominance in fashion was also a great factor in attracting Walmart to pay $16 billion to buy a 77% stake in Flipkart in May 2018.

Recently, Flipkart Group has announced its plans to acquire the loss-making wholesale cash-and-carry business of its controlling firm and US retail behemoth Walmart in India.

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