Jabong Drifts To Marketplace Model: Reports

Rocket Internet backed fashion ecommerce company, Jabong, is turning every stone to keep itself afloat. As per a Mint report, Jabong is shifting to a marketplace model from an inventory-based model amid a long-drawn sale process.

Sanjeev Mohanty, who was appointed as Jabong’s CEO and Managing Director in December last year, told ET, “As India’s leading fashion marketplace, we are proud to connect over a thousand sellers who benefit from increased distribution with millions of customers who enjoy the best combination of choice, cost and convenience.”

The company will further look forward at onboarding more sellers and customers, while enjoying good and equal working partnerships with all parties.

Jabong, which has been in tough times in making profits, is gradually moving to a marketplace model under Mohanty’s leadership.

The fashion ecommerce company had recently expedited its sale process as the firm’s owners, AB Kinnevik and Rocket Internet, were reluctant to pump in more capital.

In March this year, Global Fashion Group (GFG) had reportedly infused additional $20 Mn into Jabong, to keep it afloat for one more year, while carrying out negotiations for sale with other parties.

Jabong has been scouting for buyers for a long time. It has been speculated that online retailers Flipkart and Snapdeal and Aditya Birla Group’s fashion portal abof.com are the front runners to buy the company. Besides, Jabong’s trouble to withstand the ecommerce pressure, the company fell into the controversy over the allegation of financial irregularities by its top management.

However, before we question Jabong’s fallacy we must know that today’s India’s largest ecommerce company Flipkart also pivoted to a marketplace model in 2013. And since then the company has been extracting dollars from the investors. Also, Snapdeal too started as a daily deals platform but expanded to become an online marketplace. Does this mean that the marketplace model will be a boon for Jabong? Well, we will have to see that in the coming time.

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