Only unit in the Global Fashion Group making losses
The Rocket Internet-backed online fashion store Jabong has posted a year-on-year revenue growth of 146% for the quarter ended September 30, 2014, one of the biggest surges among the German incubator’s fashion portfolios, even as it remained the only entity in the Global Fashion Group to post losses. The full-year results and the December quarter figures will be available only in May.
In September last year, Rocket Internet created the Global Fashion Group by combining five of its fashion portfolios — Dafiti in Latin America, Jabong in India, Lamoda in Russia, Namshi in West Asia and Zalora in Southeast Asia and Australia. Ahead of Rocket Internet’s public listing, the Global Fashion Group was valued at $2.7 billion.
For the quarter ended September 30, Jabong posted revenues of R216 crore, a 146% rise from the R87.8 crore a year earlier. This puts Jabong only second to Namshi, which posted revenues of 52 million dirham (R89 crore), a 242% increase from 15 million dirham (R25.6 crore) a year ago. Jabong also ranks second in terms of gross merchandise value growth, after Namshi. Jabong’s GMV grew 177% year-on-year to R345.8 crore from R124.8 crore a year earlier. Namshi, however, grew 265% to 62 million dirham (R1,06 crore) from 17 million dirham (R29 crore).
However, Jabong, as with any other homegrown e-tailer, posted losses of R56.9 crore for the quarter against a meagre R4 crore in the year-ago period. All other entities in the Global Fashion Group were profitable. Dafiti’s profit surged 53% during the quarter while Lamoda posted a 100% increase in profit and Namshi 314%. Incidentally, Jabong, established in January 2012, is the youngest among all the group entities. Dafiti was established in November 2010 while Lamoda and Namshi were founded in 2011.
“E-commerce has been a segment that has been under profitability pressure as there has been a big focus around acquiring customers, infrastructure, distribution centres. A business has to make some upfront investment before revenue starts to come in. The Indian context is also different as it is a touch-and-feel economy. It’s early stages in India and it’s a very price-sensitive market. There are characteristics of the economy and consumer demand that one has to account for,” said Gaurav Gupta, senior director, Deloitte.
According to a report by AB Kinnevik, Jabong had shipped 2.52 million orders in the quarter, a 193.2% rise year-on-year. The fashion e-tailer’s cash position also improved significantly to R545 crore against only R58 crore in the corresponding period last year.
According to a report by Accel Partners, one of the investors in Flipkart, the online fashion, footwear and accessories market in India was valued at $559 million in 2013 and is projected to reach $2.8 billion by 2016, growing at a CAGR of 71%. Jabong has been competing with Myntra, which was bought by Flipkart in May last year for about $350 million. While Myntra posted revenues of R441.6 crore for the year ended March 31, Jabong posted revenues of R540.7 crore between January and September 30 last year.
* Jabong has posted a y-o-y revenue growth of 146% for the quarter ended September 30, 2014, one of the biggest surges among Rocket Internet’s fashion portfolios
* However, it posted losses of R56.9 crore against a meagre R4 crore a year earlier. All others in the Global Fashion Group were profitable