BackJabong sales jump, but still lag Myntra
Myntra has been more successful than Jabong in building a large private brands business
PremiumBengaluru: Deep discounts and an expansion in product assortment helped online fashion retailer Jabong.com increase sales to ₹ 541 crore in the nine months ended December from ₹ 201 crore last year, according to published reports of its Germany-based parent company Rocket Internet AG.
Despite the high sales growth, Jabong has lost significant share this year to Myntra, which has outspent its rival on discounts and advertising. Myntra reported revenue of ₹ 441.6 crore for the year ended 31 March 2014, compared with Jabong’s sales of ₹ 438 crore.
Sales at Myntra are expected to increase by roughly three times for the year ending March, according to two company executives, who spoke on condition of anonymity. After its takeover by Flipkart, Myntra’s sales growth has accelerated sharply with the company expanding its product offerings and warehousing capacity, and increasing marketing budgets and discounts. Myntra was bought by e-commerce firm Flipkart in May for more than $330 million.
Fashion is a key category in online retail as it offers significantly higher margins than electronics and books. While Flipkart, Amazon.com Inc. and Snapdeal are trying to increase sales of fashion products, Myntra and Jabong have established themselves as strong brands, according to analysts. Indians bought fashion products worth $559 million online in 2013; this number may increase to $2.8 billion by 2016, according to an April report by venture capital firm Accel Partners, which is an investor in Flipkart.
Separately, Jabong, which has seen the departure of several senior executives including two of its co-founders over the past year, has hired former Amazon India executive Sachin Sinha as its new chief technology officer (CTO). Sinha will help the company improve its mobile app, which has become the medium of choice for a majority of shoppers on the Internet. Last week Myntra said 90% of its user traffic was generated on its mobile website and shopping app.
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