Flipkart shuts down Jabong, redirects users to Myntra: Report
Flipkart has reportedly shut down Jabong e-commerce platform. The move is said to be aimed at helping Myntra gain more traction. Jabong's official website and app are now redirecting users to Myntra.
Flipkart had acquired Jabong through Myntra in 2016 for $70 million. The acquisition helped Flipkart gain a bigger presence in the fashion e-commerce space through two brands - Myntra and Jabong. Flipkart, however, in July last year said it was reducing marketing for Jabong and encouraging users to join Myntra through various incentives.
Walmart, which now owns Flipkart, said in November last year that it had taken a non-cash impairment charge of $290 million for the 'Jabong' trade name.
"Excluding the impairment charge related to Jabong, third quarter international operating income was better than plan, but declined 16% year-over-year in constant currency and 21% on a reported basis due primarily to the expected dilution from Flipkart as well as the overall gross margin...," Walmart Inc EVP and CFO Brett Biggs had said.
According to McKinsey's FashionScope report, India's clothing market is estimated to hit $59.3 billion in the next two years. The report also predicts that India will become the sixth-largest market globally.
"Given these dynamics, it is little surprise that more than 300 international fashion brands are expected to open stores in India in the next two years. But India remains a complex market that presents challenges as well as opportunities. The apparel business is still largely unorganized, with formal retail accounting for just 35% of sales in 2016. Its share is likely to reach around 45% by 2025 — still a relatively low proportion," added the report that was published in February last year.