Amazon Looking to Buy Popular Online Clothing Store Jabong
Amazon is the number one online retailer in the world. Amazon India is also having a very good run in the Indian e-commerce market. Amazon wants to improve on its performance in India and is looking to upset the apple cart of the most popular online e-retailer in India Flipkart. There are reports that Amazon is working out a deal to purchase the popular online cloth and fashion retailer Jabong.
Jabong.com is a very popular online lifestyle and fashion e-retailer in India and is at loggerheads with another popular fashion e-retailer Myntra. There are reports that Amazon has already completed the first round of talks with Gurgaon based fashion retailer Jabong management.
Amazon has offered a whopping amount of $ 1.1 to 1.2 billion to buy Gurgaon based Jabong fashion online store. If this deal materializes, then this would be the biggest acquisition in the Indian e-commerce space. You might recall that Flipkart earlier this year bough Myntra and Amazon its arch rival is also looking to make an entry into the online fashion business by buying Jabong.com.
The Jabong online fashion store is backed by UK’s CDC, Sweden’s Kinnevik and Germany’s Rocket Internet and it would not be an easy path for Amazon to acquire Jabong. Also, Amazon is a foreign company and it cannot invest its money in an Indian e-commerce company like Jabong as a foreign company, according to the Indian government’s rules.
But, with Flipkart buying Myntra, there is hope for Amazon to buy Jabong if it does certain careful structuring. If CDC, Kinnevik and others can offer money in Jabong, then Amazon will be able to own this fashion e-retail company. Amazon is looking to run Jabong as a separate entity and will not club it with the Amazon Indian retail website.
This is not the first time that reports have come up that Amazon and Jabong are in talks. There was an earlier report on October 10th that Amazon has entered into preliminary talks to buy the Indian fashion and lifestyle portal. Amazon would be looking to edge out Flipkart with this purchase of Jabong. You may recall that Flipkart bought the fashion and lifestyle e-retail store in May this year for $300 million (Rs. 2,000 crore).
Amazon, Flipkart and Snapdeal are looking to gain the top spot in the Indian e-commerce market. Amazon CEO Jeff Bezos announced a $2 billion investment in the Indian unit to compete with Flipkart’s announcement that it has raised $1 billion for its Indian operations through existing and new investors.