New Delhi : World’s biggest online retailer Amazon is upping the ante against India’s e-commerce poster boy Flipkart by reportedly initiating the acquisition of fashion portal Jabong.
Gurgaon-based Jabong is among the big players in the online lifestyle and fashion segment, along with Myntra.
According to a reports, Amazon has recently completed first-level talks with Jabong management. The fashion portal is being valued at a whopping $1.1-1.2 billion; if the deal materializes, this will be the biggest acquisition in the Indian e-commerce space.
However, Amazon may face some obstacles in acquiring Jabong, which is backed by Germany’s Rocket Internet, Sweden’s Kinnevik and UK’s CDC. As per Indian government’s rules, Amazon as a foreign company cannot invest in an e-commerce company like Jabong.
But the report says, “If Flipkart can buy Myntra, Amazon can seal this deal too with some careful structuring, especially if Rocket Internet, Kinnevik and others can pour in money into Jabong.”
The report says that Amazon will run Jabong as a separate entity after the buyout.
This is not the first time that word about Amazon and Jabong’s talks has surfaced. It was reported on October 10 that Amazon is in preliminary talks to buy the Indian fashion and lifestyle portal.
Flipkart in May this year acquired Myntra for Rs 2,000 crore (approximately $300 million).
Amazon and Flipkart, along with Snapdeal, are vying for the top spot in the fast-growing Indian e-commerce market. Amazon CEO Jeff Bezos announced a $2 billion investment in the India unitjust a day after Flipkart raised $1 billion from new and existing investors. Snapdeal recently raised $627 million from Japan’s Softbank.
