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Walmart Owned Flipkart Closes Jabong, Redirects Users To Myntra

By LawStreet News Network      06 February, 2020 11:02 AM      0 Comments
Walmart Owned Flipkart Closes Jabong, Redirects Users To Myntra

Walmart owned Flipkart has chosen to focus on its online fashion entity Myntra and the users of Jabong are being redirected to Myntra’s shopping website. The e-commerce giant acquired Myntra in 2014 and later Jabong was controlled by Myntra in a deal expected to be meriting $70 million in July 2016. At least, one hundred and fifty employees were laid-off when the amalgamation took place between Myntra and Jabong in 2018 by Flipkart under the direction of Walmart. Afterwards, a statement was made by Myntra, “The acquisition of Jabong further strengthens Flipkart Group’s position as the undisputed leader in the Fashion and Lifestyle segment in India”. Myntra and Jabong combined their fundamental business purposes, planned to integrate the all remaining functions such as technology, marketing, category, revenue, finance and creative teams. The recent development took place after Flipkart decided cutting the marketing spending and additional incentives were provided by Myntra which were attractive for users. 

The downloads for Jabong app by users was reduced by 12.71 per cent and usage of the app witnessed a decline, as mentioned in the report by SimilarWeb in December 2019. Active users on Jabong fell by 10.61 per cent but there was an increase of 41.18 per cent in downloads and 31.87 per cent in daily active users of Myntra in November 2019. Nevertheless, the cmpany's filings for FY2019, ending in March 2019, show that Jabong deducted its expense by 6.4%. In the meantime, the company’s income also grew by 30%, leading to a 2.8% reduction in losses. Jabong noted a 104% year-on-year growth in its revenue, accounting for INR 41.87 crores of profits reported in FY19. The corporation registered a loss of INR 22.41 crores in FY19 as compared to INR 35.9 crores earnings in FY18 and Flipkart took non-cash impairment of $290 Mn on account of Jabong’s trade name. Besides, Jabong’s estimation was abridged in the third quarter of FY20 in the financial report for 2019-20. 

 

Author: Asif Iqbal



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