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Amazon in talks to acquire Jabong
MUMBAI: Heating up the e-commerce battle further, US online retail giant Amazon is reported to be in talks to buy fashion portal Jabong.
During his visit to India, Amazon CEO Jeff Bezos had said that he was excited about the potential of the fashion industry in India, which could be a signal as the Indian arm of the retailer has begun preliminary talks with the Indian fashion e-tailer.
The move would give Amazon a required push in the fiercely competitive e-commerce market in India. Rival Flipkart had earlier this year acquired another fashion e-tailer Myntra for around 330 million to boost its presence.
Bezos further said that one sector that he expects to do well in India is fashion because of the presence of various regional fashions across the country.
If it goes through, the merger is expected to help Jabong raise the much-needed capital to take on the Flipkart-Myntra nexus, which had recently raised $1 billion. Amazon had also said it would invest $2 billion in India.
However, Jabong could be an expensive acquisition for Amazon, as it is stated to be second to Myntra in the online fashion space, and a significant portion of Amazon’s $2 billion investment in the country could be utilised for the deal.
Amazon India started offering fashion products on its marketplace in May, and an acquisition offers a swift route to scale up its business. In the US, Amazon bought Zappos in 2009 to improve its fashion credentials.
Jabong is part of a global group after its investors, German venture capital group Rocket Internet and with Swedish investor Kinnevik, announced a merger of five emerging market fashion start-ups. The merged entity is called Global Fashion Group (GFG) and is reported to be worth about Rs 21,000 crore.