JabongJabong, the Rocket Internet incubated online fashion retailer, reported that orders increased to 1.95 million for the quarter ended 31st March 2014 (Q1 2014), from 1.78 million in the previous quarter, and 0.72 million in Q1 2013, according to data published by its investor Swedish investment firm Investment AB Kinnevik. Investment AB Kinnevik is an investor in Jabong and other Rocket Internet portfolio companies.

This growth in orders placed represents a 170.83% increase in orders year-on-year. However, orders increased only by 9.8% quarter on quarter, validating that Q1, which follows the festive season, is a weak quarter for commerce. Q4 had witnessed a growth of 56.89% over Q3.


Jabong now has a total customer base of 2.89 million, as opposed to 2.34 million in the previous quarter and 1.04 million in Q1 2013. While the customer base grew at a rate of 30.43% in Q4 2013, in the first quarter of 2014, it reduced to 1.30%.

Source of revenue


Most of the company’s revenue comes from women’s apparel, followed by men’s footwear and accessories.

It is not clear how Jabong’s revenues will be affected by Flipkart’s acquisition of Myntra. Investors are right now split on how that deal will affect other players in the industry. Jabong has secured a multi-million dollar investment earlier this year, of which $27.5 million investment from UK’s development finance institution CDC Group plc.

Growth in customer base

Jabong’s customer base more than tripled to 2.34 million by the end of 2013, from 749,000 users at the beginning of the year. In the first quarter of 2014, the company added 547,000 new customers to take the total customer base to 2.88 million.


Getting more of its existing base to transact via the service will a challenge for Jabong, much like it is for other players in the e-commerce space.


Flipkart and Amazon have been offering various incentives to convince people to sign up for its service. These include subscription services such as Flipkart First and special offers available to those using mobile apps. Jabong on the other hand did not even have a mobile app till April this year. That is a serious concern especially when Snapdeal is reporting that 50% of its transactions are coming from mobile.

Is Jabong over-dependent on new customers for increase sales?


As you can see, there seems to be direct relation between new customers signing-up on Jabong and growth in orders placed, suggesting a dependency on new customers for increasing orders, and Jabong’s base of returning customers has peaked at 51%.


When customer base increased at a double digit rate throughout 2013, so did its orders placed. However with increase in customer base down to single digits, order growth is also down to single digits. It is worth remembering that there are seasonal changes in demand which could have also affected sales growth.



Brands available: Jabong seems to be doing a decent job when it comes to getting merchants and brands to sign up. The number of brands available on the service has increased by 51% YoY to 1,744 from 1,155.

Orders fulfilled: In Q1 2014, 99.6% of orders placed on Jabong were fulfilled, as opposed to 99.3% in the previous quarter.

Scale of operation: Jabong has a total warehouse capacity of 215,000 sq ft, with delivery service to over 12,000 pincodes across India, including 630 cities. Do note that Jabong also had a logistics arm called JaVAS, that it sold earlier this year.

Discrepancy in data

The report states that the number of orders per customer has increased to 1.68 from 1.58 QoQ and 1.39 YoY. However, dividing the number of quarterly orders by number of customers transacting per quarter, returned completely different figures. According to our calculation, the average order per customer should have been 2.45 in Q1 2014 and 2.49 in the previous quarter.

Who’s who: Mukul Bafana and Manu Kumar Jain had left the company last year. Arun C Mohan (CEO) and Praveen Sinha (MD) are the only remaining co-founders at the company.

The coming months should be interesting as we feel Jabong would be the most affected by the acquisition of Myntra by Flipkart. Especially since Myntra is expecting a $100 million cash infusion from Flipkart.

Download: Kinnevik Rocket Capital Markets Day presentation, Berlin, May 22nd 2014 (pdf)