Walmart likely to kill brand Jabong

Announcing Binny Bansal's exit as Chairman and CEO of the Flipkart Group on Tuesday, Flipkart's parent, Walmart, in its statement also said Myntra and Jabong would continue to operate as separate platforms within the Flipkart business. However, sources privy to the development told BusinessLine that Walmart is seriously contemplating killing brand Jabong after merging it completely with Myntra.

The rationale for doing so is that Flipkart Fashion, including its five private label brands, which garnered 50 per cent market share during the festive season, combined with Myntra, including its 17 private label brands, which enjoys a strong brand following, will suffice to dominate the online fashion market in India. The Flipkart-Myntra-Jabong combine holds nearly 80 per cent of the online fashion market share in the country at present.

On reaching out to Myntra, the company sent out the following statement: “Since Myntra's purchase of Jabong in mid-2016, the two brands have been steadily integrating key business functions and streamlining processes. This has resulted in revenue growth and a significant improvement in the customer experience. As the next step in this process, Myntra and Jabong will now fully integrate all the remaining functions, including technology, marketing, category, revenue, finance and the creative teams.”

The statement further added that the "closer integration of Myntra and Jabong is a necessary step in its continuing development. Myntra's independence as a business will be preserved. From the consumer perspective, the well-loved Jabong brand will remain."

“Walmart will lay off up to 60 per cent of Jabong's 400-odd full-time employees, while it remains to be seen what whether they will retain the 50 contractual employees. They are planning to eventually kill brand Jabong, as they are of the opinion that it can comfortably be merged with the Myntra business without losing out on market share,” said the same sources.

Myntra and Jabong together employ 3,500 employees, of which Jabong employs 450. Overall, the lay-offs will account for less than 10 per cent of Myntra-Jabong's overall headcount, which is business as usual, when two organisations merge, say analysts and head-hunters.

Ananth Narayanan will continue as CEO of Myntra and will report to CEO of Flipkart, Kalyan Krishnamurthy. Myntra insiders said Narayanan will continue at the helm, as he enjoys a good working relationship with the Walmart top management, especially with the CEO of Walmart's International Division, Judith McKenna. Other top management executives, including Gunjan Soni – Chief Marketing Officer of Myntra and Head of Jabong; Ananya Tripathi – Chief Strategy Officer of Myntra & Head of Categories; and Dipanjan Basu, CFO Myntra are on their way out.

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