And it’s not complicated: Flipkart-owned Myntra Designs has agreed to buy Rocket Internet-backed online fashion retailer Jabong for $70 million in cash.
The acquisition will bolster Flipkart’s position in the online fashion market, according to an article published by NewsRise. Fashion is the fastest growing ecommerce category in India, as a growing population of Indians shop for everything from phones to clothes and accessories on the Internet.
India’s ecommerce market was estimated to be worth $22 billion in 2015, according to data from PricewaterhouseCoopers. Clothing accounted for nearly a fourth of that market, according to the PwC data.
Jabong has been struggling to expand in the face of stiff competition in the market. In the fiscal year that ended in March, Jabong posted a net revenue of 126 million euros, with adjusted operating loss of 56 million euros, the company told NewsRise in a statement.
Flipkart has been the marketplace leader in India, but has been fighting to compete with growing Indian marketplace Snapdeal, as well as Amazon, claims to be the dominant marketplace in India.
On Tuesday, Amazon announced the launch of its Prime delivery service to more than 100 cities in India. And in 20 cities, Amazon announced same-day and scheduled deliveries at a discounted rate for Prime members.