Amazon appears to be in talks to acquire the fashion website Jabong as a part of its plan to strengthen its presence in the fashion products retailing, claim sources familiar about the discussions. Jabong is a popular fashion portal that has other suitors as well and Amazon is interested in buying it, claim the sources, but they also caution that an imminent deal in not feasible.
Fashion portal Jabong was nurtured by a regulatory filing by Rocket Internet and it claims that the value of the portal is 388 million euros that translates to Rs 3,000 crore. As per a person with direct information about the negotiations between the two firms, Jabong is holding on for too much than its investment and it is around a whopping $700 million and the US based retailer Amazon has not disclosed any comment on this such as they may or may not finalize the deal in future.
This move of Amazon trying to take over the fashion portal Jabong is not too surprising and it is to take over on e-commerce giant Flipkart that acquired Myntra lately. A person working closely with Amazon on the Jabong negotiations have claimed that Jabong is the next ideal candidate in the fashion industry.
Moreover, Jeff Bezos Amazon Founder who visitedIndialately is claimed to be in plans to invest a huge sum of $2 billion in the country for the acquisitions purpose alone. It is evident that Amazon is battling with the market leader Flipkart for the dominance inIndia, one of the markets that is growing rapidly in the online retail segment. As per the consultancy Crisil, the online retail industry is believed to reach Rs 50,000 crore by 2016.
As per the industry experts, Flipkart and Myntra together have a market share of over 50 percent in the fashion retail, whereas Jabong has 25 percent. The other significant fashion portals are Fashionara and Limeroad respectively.
As per retail consultancy Technopak, the fashion industry accounts for 25 percent of the online retail sales. AmazonIndiaalso debuted with fashion products in May this year, but an acquisition of a popular portal will pave way for a faster scale up in the market share. Back in 2009, Amazon acquired fashion website Zappos inUnited Statesas well.
