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Myntra Acquires Jabong

India: Flipkart’s subsidiary Myntra had acquired Jabong in a strategic deal amidst heavy competition. Jabong was valued at USD508 million in December 2013. With the market slumping, the deal is said to be probably a very attractive price for Flipkart.

Amazon which had invested huge amounts into advertising and promotion has still not surpassed Flipkart’s market share in the fashion segment. This deal is also a big blow for competitor’s as they are anticipated to lose a huge chunk of the market share in the online fashion retail industry.

According to TechSci Research, the deal will extend the dominance of the company in the online retail fashion space and this move is anticipated to maintain its dominant position in the future. The deal was eyed by Snapdeal and Reliance Industries through AJIO Life, which is the company’s online fashion portal and Aditya Birla group, as the online fashion industry is a huge margin attracting category. The e-retail market is expected to witness a significant growth over the course of next five years on the back of rapidly growing e-commerce market in the country.

According to a recent report published by TechSci Research, “India E-Commerce Market Forecast and Opportunities, 2020, the country’s e-commerce market is projected to grow at a CAGR of more than 36% during 2015-2020. E-services segment, which comprises online travel, online payments, online classifieds, etc., is expected to continue its domination through 2020. However, the e-tail segment that includes electronics, apparels & accessories, health and personal care, etc., is expected to witness significantly higher market growth compared to e-services segment over the next five years. During 2015-20, the western region is expected to remain the largest e-commerce market in the country. Major players operating in India’s e-tail market include Flipkart, Snapdeal and Amazon.

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