An initial public offering by global Internet incubator Rocket Internet in Germany could see home-grown online fashion portal Jabong strengthen its position in the burgeoning Indian e-commerce market.

Rocket, the majority shareholder in Jabong, is planning a $970-million IPO on the Frankfurt Stock Exchange later this year, according to some reports.

This development comes a few days after the Berlin-based company announced that it plans to integrate all its five major fashion portals, including Jabong, into one entity called Global Fashion Group and turn it into a $3.5-billion company.

The other portals are Dafiti (Latin America), Lamoda (Russia and CIS), Namshi (West Asia) and Zalora (South Asia and Australia).

While Rocket’s public issue on the German bourse will not benefit the Indian market or Jabong directly, industry experts and analysts say the IPO proceeds will be used in the integration process. Some of it might be used to expand operations of Jabong in countries such as India, Sri Lanka, Pakistan and Bangladesh, they add.

“As Rocket gets more money, it will be good for all its investee companies, including Jabong, which are very capital intensive. Given the fact that e-commerce is growing fast, especially fashion, the fresh funds will help take on big rivals,” says Harish HV, Partner, Grant Thornton.

Competition New Delhi-based Jabong, founded by Praveen Sinha and Arun Chandra Mohan, is facing stiff competition from the fashion portal Myntra, ever since it got acquired by the country’s e-commerce poster boy Flipkart in May this year. That apart, global giant Amazon has also upped its fashion play in India.

This tough competition could also influence Rocket’s India plans.

“Integrating could also bring in some cost reduction as operations, technology, supply chain and hardware can be integrated. There also could be lot of strategic learning from each business,” Harish says, adding there could also be a flip side to it as Rocket might reduce its headcount globally.

A mail sent to Jabong’s founder Sinha remained unanswered till press time.

Founded in 2007 by the Samwer brothers (Marc, Oliver and Alexander), Rocket Internet is one of the largest Internet incubators in the world.

It has created over 100 companies in over 50 countries, dozens of which have been exited successfully.

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