Indian fashion e-commerce site Jabong, a part of Rocket Internet’s stable of online ventures, is being merged with four other global fashion related ventures of the group, creating an emerging markets-focused fashion e-commerce firm Global Fashion Group (GFG), as per a public statement.
Apart from Jabong, GFG would have Dafiti (Latin America), Lamoda (Russia & CIS), Namshi (Middle East) and Zalora (South East Asia & Australia) covering 23 countries.
As of June 30, 2014, the companies combined together had 4.6 million active customers and over 7,000 employees. They had 353 million unique visitors for the first six months of 2014 and received 8.4 million orders. They together generated €436 million ($573.29 million) of gross merchandise volume during January-June 2014. In 2013, their IFRS revenues were €406 million ($533.84 million).
Since launch in 2011 and 2012, the five e-commerce companies have attracted funding in excess of €1 billion ($1.31 billion) from Sweden's Kinnevik, Access Industries, Summit Partners, Verlinvest, Ontario Teachers' Pension Plan, Tengelmann besides other investors.
GFG would be valued at €2.7 billion ($3.5 billion).
"The combination will improve global best practice sharing across functions, deliver economies of scale in sourcing international brands and marketing with global media channels, strengthen the private label efforts, enhance GFG's ability to attract and retain top talent, accelerate development of technology platforms, and enable GFG to acquire a leadership position in growth market fashion e-commerce," Kinnevik said in a statement.
GFG will house multiple business models including full inventory, branded shops and marketplaces tailored to the opportunities within the local markets of the five ventures. It also plans to explore the development of adjacent categories like personal care.
As part of the deal, all the direct and indirect shareholders in the five existing e-commerce companies will contribute their shares into a newly formed Luxembourg-based entity. The three largest shareholders in GFG will be Kinnevik, Rocket Internet and Access Industries, with 25.1 per cent, 23.5 per cent and 7.4 per cent ownership interests, respectively.
The GFG companies will continue to be led by their respective founders and management teams with a few select additions to the leadership team.
The board of GFG will include Lorenzo Grabau, CEO of Kinnevik as chairman, Oliver Samwer, co-founder and CEO of Rocket Internet as deputy chairman and representatives of the other large shareholders.
"By operating as a single entity, Dafiti, Jabong, Lamoda, Namshi and Zalora will be even more effective in expanding their leadership positions in their respective marketplaces," said Grabau.
"GFG will be focused on capturing the massive growth opportunity of fashion e-commerce in emerging markets. Each of the business units will be able to build on the original Rocket platform and continue to leverage knowledge and expertise gained across 23 countries," said Samwer.
Rocket's other Indian ventures include CupoNation, FabFurnish, Foodpanda, PrintVenue, OfficeYes and 21Diamonds.
Jabong is said to be the second-largest fashion and lifestyle e-tailer in the country, behind Myntra. Myntra was acquired by Flipkart early this year.
(Edited by Joby Puthuparampil Johnson)
