Myntra, India’s largest online fashion retailer, recently announced the acquisition of rival Jabong, creating the country’s biggest fashion destination. Myntra CEO Ananth Narayanan spoke to Economic Times about how Myntra intends to run Jabong and the future of the consolidated online fashion destinations. Excerpts from the interview:
How did you swing Jabong your way against formidable suitors like Snapdeal and Future Group?
I believe that across Myntra and Jabong, between two lifestyle and fashion destinations, we can really shape the market. In some way it makes a lot of logical sense and then, Flipkart as a group, in any case dominates fashion. In all deals the real question is where is the value creation? In my mind the value creation is the ability to shape the fashion and lifestyle market and to see how we get our 15 million monthly customers across Myntra and Jabong really shop differently for fashion.
What are the contours of the deal?
We are buying them out. I don’t want to comment on the valuation.
Would you keep Jabong or will you merge Jabong into Myntra?
We intend to keep Jabong as an independent company. We will run it. It is the whole point about growth and synergy and we will absolutely run Jabong and Jabong has very strong Indian and international brands. Wherever there are possibilities to leverage each other, we will.
How do you intend to build two brands at the same time?
My own sense is very simple. We could look at life as competition and we could look at life as possibility. I look at life at possibility. We are only at 3% online penetration and we are going to 10%. There is more than enough space for two large fashion brands.
Next year you are going to hit $1 billion and even turn profitable. How does that change with this acquisition?
Early days to comment. We will look at the supply chain side if we can leverage third party service providers. We could leverage eKart. Overall, the acquisition, and I dare say, partnership, is going to help Myntra and Jabong.
How many brands are you looking on the combined entity?
I think we are looking to get to close to 2,500-3,000 brands as there is an overlap in the brands.
What are the strengths that Jabong brings to the table? Are there territories where you are strong and some where Jabong is?
Jabong is very strong in women and in international brands. Myntra has great strength in private brands and I think we can leverage these. There is no reason for not selling Myntra’s private brands on Jabong and maybe some of the brands at Jabong we can leverage at Myntra. These are things that can shape over the next several months and we are not in a hurry to rush into it.
I think geographically, my sense is Jabong is probably stronger in the NCR region and that is something we can leverage.
This is one of the biggest consolidations in India. Do you have other targets?
Just to correct you, I don’t think this is a consolidation in the traditional sense of consolidation. I intend to run Myntra and Jabong as separate entities. At this point of time I am not looking at any other acquisition.