Jabong was a top-rated Indian fashion and lifestyle e-commerce platform. Rocket Internet was the parent company of Jabong, who was funding this company also. It was founded by Manu Kumar Jain(former Vice President, Xiaomi and Managing Director, Xiaomi India), Praveen Sinha, Lakshmi Potluri, and Arun Chandra. The company was having a big it's the biggest rival, i.e., Myntra.
The Jabong e-commerce platform consists of many different products in the category footwear, fashion accessories, and other fashion and lifestyle products. They were one of the best sellers in their market after Myntra.
The e-commerce giant Flipkart acquired Jabong for $70 million acquisition cost in the year 2016. This was one of the best deals for the Flipkart at that moment of time. In February 2020, Flipkart formally shut down Jabong. The primary reason behind this shutdown was to shift focus entirely on its premium clothing platform Myntra, which India's biggest fashion and lifestyle e-commerce platform.
The company had many rise and falls which led this situation some of them are:-
1) NO DIFFERENTIATION FACTOR
The fashion portal Jabong, has no differentiation factor. The company was doing the same things which were done by other companies like Myntra, Flipkart fashions, and Amazon fashions. These companies have a large amount of funding, which helped them to survive in the loss in this market, but Jabong did not have enough funding because of which they were not able to give more bigger discounts.
2) LEADERSHIP PROBLEMS
The founders of the company Manu Kumar Jain,Arun Chandra and Praveen Sinha left the company in its initial period. This was one of the biggest problems, which led to the downfall of the company. The company, which is having problems in the roots of the company is not able to sustain for a more extended period of time.
3) FUNDING CRUNCHES
Jabong was funded by its parent company, i.e., Rocket. In the starting, the company had proper funding, but in the end, the company was not getting enough money to give more discounts. On the other hand, the company like Flipkart was funded by the big venture capitalists like Tiger Globals and Softbank. This helped the company to sustain at the time of funding crunches. Amazon also had the same situation, and so they were also able to sustain at that moment of time.
4) NO SINGLE GOAL
Jabong did not have a single goal. The goals of the company were changing with every small period of time. This was one of the biggest problems. The company was changing its goal by looking towards the intention of the other big giants. This led to the downfall of the company.
There was a time when Jabong was giving an excellent competition to Myntra and other fashion e-commerce platforms, but due to all the problems as mentioned earlier, the company was not able to sustain for the long time in this e-commerce market. This eventually decreased its valuation from $1.2 billion to $70 million and so Flipkart purchased in this nominal amount. Now, at this moment, the Flipkart has also closed all it's operations and service for Jabong, in order to reduce the marketing cost. This is because of the fact that Myntra and Jabong have all the same operations, but the Flipkart had to spend marketing cost on both of them. So, Flipkart came with the decision that they are closing all its operations for Jabong.
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