oppn parties Flipkart Has Got Jabong For Peanuts

News Snippets

  • Supreme Court holds hotels liable for theft of vehicle from their parking area if parked by valet, says "owner's risk" clause is not a shield from such liability
  • Finance Minister says she is receiving feedback from many sectors that recovery is happening as there is lower stress
  • Sabarimala temple opens, but police bar the entry of women below 50 years
  • Finance Minister Nirmala Sitharaman says Air India and BPCL to be sold off by March
  • Media person Rajat Sharma resigns as DDCA president
  • Shiv Sena, NCP and Congress postpone meeting the governor of Maharashtra
  • Shiv Sena not to attend the NDA meeting on 17th November, says break up "a formality"
  • Shiv Sena says that the confidence the BJP is showing about forming the government in Maharashtra is based purely on its expectation of getting numbers through horse trading
  • Anil Ambani resigns as director of the bankrupt Reliance Communications
  • India beat Bangladesh by an innings and 150 rums inside three days in the first Test. Indian pacers excel after Mayank Agarwal's double century
  • Sena-NCP-Congress work out a common minimum programme, will form the government soon and it will last 5 years, says Sharad Pawar
  • Income Tax Appellate Tribunal upholds the decision to withdraw the charitable status of Young India, making it liable to pay Rs 145 in income tax. Rahul Gandhi and Priyanka Vadra are the majority shareholders in the company
  • CBI raids offices of Amnesty International across India
  • Supreme Court quashes NCLAT order against Arcelor Mittal and paves the way for the company to take over ailing Essar Steel
  • Finance Minister Nirmala Sitharaman says concerns of telcos will be addressed and no company will close down
Supreme Court dismisses plea for review in Rafale case, says no need for roving inquiry, maintains clean chit to government
oppn parties
Flipkart Has Got Jabong For Peanuts

By Sunil Garodia

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator. Writes for a number of publications.
How the mighty fall! In the end, Jabong got sold for just $ 70 million. Two years back, it was valued at over $ 1 billion. But those were other times. Customer acquisition and retention were the buzzwords for valuation then and a mad spree of throwing good dollars behind bad ones was being witnessed. Everyone in the business thought that these companies would turn around one day. No one explained how, though. With a flawed deep discounting model that kept on subsidizing the sellers on the platform to lure customers, these companies failed to realize the psyche of the Indian (or those anywhere) customers. Once the discounts stop, there are no volumes to speak of. So, instead of ecommerce, these portals were peddling discount commerce. The valuation was bound to plummet, but it is shocking to see the depth to which it has really gone.

Have you got your deal at Flipkart yet? Get it here

Jabong was one of the first players in the fashion etail space and had carved out a niche for itself. But its main owner, Rocket Internet, is accused of applying two spoilers in the business. It used the cut and paste method of other countries to its internet properties in India. Then, it does not have the patience needed to sustain these acquisitions. Rocket is having trouble with all its properties like Foodpanda, PrintVenue and Cuponation. It has already sold Jabong and Fabfurnish. It claims it was shortchanged in its sale of GoJavas, the logistics startup that delivered for Jabong. It also feels that its employees cheated it. But experts have pointed out that the policies of creating startups by hiring employees at the top means that they have no emotional connect with the business. Hence, the required go-getting attitude is also missing. Rocket’s ecommerce ventures have flopped due to this.

With Flipkart acquiring Jabong through its earlier acquisition Myntra, it has emerged as the major player in the market. It remains to be seen whether this deal will be on the radar of Competition Commission of India (CCI) as it has all the trapping of creating a monopolistic behemoth in the ecommerce space. Myntra has said that since Jabong has an excellent brand recall and loyal customers, the brand will be kept operational without being merged. Although Flipkart will be benefitted by adding the large pool of customers at Jabong, it will need to look at the numbers closely. For, although Jabong has pruned its losses, it is still bleeding badly. That was one of the main reasons it got sold for peanuts.

Latest products. Amazing Discounts. Only at Flipkart. Get them here