oppn parties Flipkart Has Got Jabong For Peanuts

News Snippets

  • EMI's set to rise after the RBI hikes key policy rate
  • Calcutta HC says that the right to privacy does not end with the death of a person
  • Supreme Court says that a delayed order of preventive detention makes it invalid
  • Shashi Tharoor posts an erronous map of India in his manifesto, rectifies the error after criticism
  • Sonia Gandhi to take a call on who will be Rajasthan chief minister
  • Mallikarujun Kharge to be the new candidate to oppose Shashi Tharoor in the Congress presidential elections
  • RBI says that the September inflation rate may be higher than 7%
  • RBI hikes key rates by 50bps, downwardly revises FY23 growth rate to 7% from 7.2% earlier
  • Stocks recover well on Friday: Sensex gains 1016 points to0 57426 and Nifty 276 points to 17094
  • Mirabai Chanu wins gold easily at the National Games
  • In a first, the Supreme Court recognizes marital rape, although for the limited purpose of allowing married women the right of abortion up to 24 weeks if they conceived as a result of forced sex by their husbands
  • Air India cuts discounts on base fare to students and senior citizens from 50% to 25%
  • Mallikarjun Kharge and Digvijay Singh are being touted as frontrunners to take on Shashi Tharoor in the elections for the post of Congress president
  • Sonia Gandhi will decide who will be Rajasthan CM if she feels there is a need to change guard after the near-rebellion by MLAs in the state
  • Ashok Gehlot bowed out of the race for being Congress president after meeting Sonia Gandhi
RBI hikes key rates by 50bps, stocks jump and recover 50% of the losses incurred in the last few session
oppn parties
Flipkart Has Got Jabong For Peanuts

By Sunil Garodia
First publised on 2016-07-28 22:31:42

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator.
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