Jabong: sale of the Indian Zalando is being evaluated

By

Matthieu Guinebault

Published
Oct 1, 2015

Global Fashion Group, the organisation which groups together the Zalando 'clones' from emerging countries, could soon sell Indian site Jabong to local payments company Paytm.

The news comes from the LiveMint portal, which mentions three sources close to the deal, with initial negotiations already under way. For the time being it appears that Jabong is being valued at between €446 and €714 million (from $500 to $800 million).

The fashion portal was reportedly already on Amazon's radar, the US giant wanting to strengthen its presence in a promising market such as India. Negotiations ceased at the start of the year, the selling party setting the price tag at over €1 billion ($1.2 billion).

Estimates suggest the Indian consumption goods market will be worth €1 trillion in 2020, compared to €493 billion now. This increase will be brought about chiefly by the rocketing of online sales, expected to grow by at least €100 billion in five years. Likewise, the local apparel market is set to expand from €53 billion ($60 billion) today to €125 billion ($141 billion) in 2020.

In the 2014 fiscal year, Jabong reported €8.1 billion in revenue, a €3.4 billion increase compared to 2013. At the same time, the portal generated a profit of  €1.5 billion, equivalent to a 19.7% rise.

On July 3rd, Global Fashion Group announced it raised some €150 million to fund the strengthening and expansion of its various sites, including Zalora (South-East Asia), Dafiti (Brazil), Lamoda (Russia), Namshi (the Middle East) and Jabong (India).