Jabong set to enter $1-billion club

Jabong, a leading fashion e-commerce company, looks set to enter the one billion-dollar club this year. Rocket Internet-led Jabong reported a gross merchandise value of $300 (Rs 1,800 crore) million at the end of 2013, which doubled in 2014 to about $600 million (Rs 3,600 crore).

"We have grown by at least two times in 2014 but the exact numbers are yet to be firmed up. For 2015, the plans seem similar, as we would grow more than the market rate. As the industry is already on a high trajectory growth, we should be able to clock a growth of two times, maybe a bit more,” Praveen Sinha, co-founder & CEO of Jabong, told Business Standard.

Fashion e-tailing has registered faster growth compared to other segments in e-commerce. Margins too are higher in the segment, say experts.

Adding to Jabong's own sales, the planned Global Fashion Group (Jabong is part of this) will work as a catalyst for the Gurgaon-based firm to touch $1-billion turnover mark.

GFG is likely to take shape within first quarter of 2015, according to disclosures by investor Kennevik. Jabong, which was given shape by Rocket Internet, will be merged with Dafiti of Latin America, Namshi of the Middle East, Lamoda of Russia and Zalora of South East Asia and Australia. GFG would emerge as one of the biggest internet empires outside US and China on the lines of Amazon and Alibaba.

"GFG becoming a reality would work positive as more international brands and private labels would pour in at our portal via common sourcing. There will also be a lot of knowledge sharing on information technology and other local innovations like cash on delivery in India," said Sinha.

The five portals put together at GFG will have 4.6 million active customers and generate 463 million of gross merchandise volume annually. The combined entity is valued at $2.7 billion (Rs 21,600 crore), based on the last funding rounds of all five companies, according to Kennevik.

Kinnevik, Rocket Internet and Access Industries together have a share of 56% in GFG.

On reports that Amazon was in talks to acquire the company, Sinha said, for now, it (Amazon) was off the radar and that his focus was on GFG.
According to him, Jabong would make sizable investment in upgrading technology and scaling up distribution. The company has recently opened JLabs, its research and development centre, in Bangalore.