‘Jabong wants to be the first e-comm firm to break even’

Priyanka Pani Mumbai | Updated on January 19, 2018


We’re focussing more on the mobile now, says CEO Sanjeev Mohanty

The year 2016 looks to be a great start for Indian online fashion retailer Jabong, a part of Germany-based Rocket Internet group. The company, which took off well in 2011, seems to have been wailing for last one and half years for multiple reasons from lack of funds to the all the founders calling it quit at the fashion e-tailer.

However, January 2016 has been the “best” performing month for the company ever since it started operations in the country with 35 per cent growth in net revenues and 20 percent growth in traffic.

Sanjeev Mohanty, who took over the company in December last, spoke with BusinessLine on how he plans to bring Jabong back on the growth track. Mohanty was earlier the Head of lifestyle brand Benetton India.

It has been just two months since you joined and we are seeing the results. How did you managed to get Jabong on growth track after a period of slack?

It is not a result of just two months. But, yes we have changed a couple of things on how we run the business. We have started looking at customers in a different way by focusing on the pricing strategy.

For example, we are now using data analytics to understand what kind of products are consumers buying in certain geography and what is the price point they are searching for. This also helped us push for our top performing brands. Besides, we are focussing more on the mobile now.

We now have a daily plan at Jabong instead of weekly or monthly.

It is also important to mention here that the growth has come in despite very low cash burn in the last one year.

We have brought down our cost of customer acquisition through efficient planning. For example, we had carried out flash sales every two hours during India-Australia T-20 series.

Is the growth sustainable given the fact that you are not keen on burning cash going forward?

Yes, very much. In a year’s time, we will knock it off. We are targeting $1 billion GMV by the end of this year with actual sales in the range of ₹ 1,600-1,800 crore. We already have touched a $66-million GMV in January with a 56 per cent growth in gross orders. We have also set up a target to become the first e-commerce company to break even.

Do you think that doing away with discounts can improve margins and help profitability for all e-commerce companies?

It is a singular issue and people think that discounts are given to drive market share, which is true but not entirely.

There are problems related to pricing and operational challenges. In a bid to achieve profits, one needs to improve the internal efficiencies.

How will you differentiate Jabong from the other vertical fashion players, including Myntra?

Fashion is a very important category even for horizontal players such as Flipkart and Amazon. So we have lot of competition. But going ahead we will focus more to curate products for the customers and also invest in technology to ensure that consumers are able to discover these products. We will be getting more brands on our platform but we are not at all focusing on private labels. (Myntra is betting big on private labels instead)

What actually went wrong with Jabong?

Nothing went wrong. There was a slight vacuum for some period. It happens with every company at some point in time.

There is a different kind of competition that might impact the fashion e-tailers and that is emergence of rental economy. It seems consumers are finding value in renting out products. What is your take on this?

Well, I don’t see any threat from the companies renting out clothes. Fashion is a huge market with different kind of consumers. Only luxury products will drive the rental market.

What kind of trends will drive the fashion e-commerce this year?

We are witnessing a huge rise in different kind of customers/consumers who are looking for specific products or category. People are searching for apparels for holiday, beachwear, performance wear among others. This gives us huge opportunity to come out with different categories within fashion.

Any fund-raising plans?

We are a part of GFG (Global Fashion Group, an arm of Rocket Internet), which has adequate funding. We keep receiving offers and we are evaluating constantly.

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Published on February 03, 2016
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