Jabong aims at 40% sales growth
Flipkart-owned online fashion retailer Jabong aims to grow sales by at least 40% in the next fiscal year, driven mainly by advertising, sales from newer brands and the introduction of private label brands owned by sister company Myntra, a top company executive said.
In an interview, Myntra and Jabong CEO Ananth Narayanan said Jabong will look to hit three key targets by the end of the year.
“We want to hit 40% growth year-on-year. We also want to get Ebitda profitability—we want to see if (Jabong) can get to Ebitdazero by December. Thirdly, we want to drive growth through new customers, not just existing customers... the sales growth will mainly happen through three things: marketing, selection and private brands,” Narayanan said. Ebitda, which stands for earnings before interest, taxes, depreciation and amortisation, is a measuring of operating profit.
Flipkart bought Jabong from Germany’s Rocket Internet and Kinnevik AB, a Swedish investment firm, in a cut-price deal for $70 million last July, trumping a rival bid by Snapdeal.
Flipkart dominates online fashion sales with its ownership of Myntra, the largest specialty fashion retailer, and Jabong, besides sales on its own platform. Flipkart’s fashion business is seen as a key advantage it has over arch-rival Amazon India, which has otherwise matched Flipkart in product categories such as smartphones for much of the past 15 months.
Narayanan said Myntra’s private brands — such as Roadster, Dressberry and Anouk—will be available on Jabong.
“There will be more marketing that we’ll do. Secondly, the app will become much more engaging. We can start to integrate more content into the fashion app than we do now. There will be product-related changes. Thirdly, we will continue to get more brands on Jabong. Our entire private label from Myntra will be available on Jabong.”
Last week, Mint reported that Myntra plans to invest in and forge strategic partnerships with at least 15-20 local fashion brands as part of its new accelerator programme, and is simultaneously looking to bring more international brands to its marketplace this year.
The e-tailer, which completed 10 years of operations earlier in February, is also exploring licensing partnerships to bring more top international brands onto its platform this year, while also launching a few more private brands.
Myntra recorded sales of over ₹50 crore from Jabong during its flagship End of Reason Sale in January, according to two people directly aware of the numbers. In January, Myntra reported sales of over ₹850 crore, including gross sales from Jabong.