Rocket Internet AG and Investment group AB Kinnevik recently sealed an agreement to combine five leading fashion e-commerce businesses to create a new global fashion e-commerce group (CFG), which will operate in five continents.
The five businesses – Dafiti (Latin America), Jabong (India), Lamoda (Russia & CIS), Namshi (Middle East) and Zalora (South East Asia & Australia) – currently covers 23 countries serving a EUR330 billion (USD) fashion market and a population of over 2.5 billion people. As of 30 June 2014, the five GFG companies had 4.6 million active customers and over 7,000 employees. For the first six months of 2014, GFG websites had 353 million unique visitors, received 8.4 million orders and generated EUR436 million of Gross Merchandise Volume.
Under the new group, GFG is expected to market a wide assortment of leading international apparel and accessories brands, a tailored selection of highly engaging internally developed brands and local assortments developed for specific ethnic markets notably in India, Indonesia and the Middle East. It will also maintain multiple business models including full inventory, branded shops and marketplaces tailored to the opportunities within the local markets, but will continue explore the development of adjacent categories like personal care.
Rocket Internet said combining the five companies will improve global best practice sharing across functions, deliver economies of scale in sourcing international brands and marketing with global media channels, strengthen the private label efforts, enhance GFG’s ability to attract and retain top talent, accelerate development of technology platforms, and enable GFG to acquire a leadership position in growth market fashion e-commerce.
“The creation of GFG brings together five powerful digital brands led by a unique group of highly talented founders and managers. By operating as a single entity, Dafiti, Jabong, Lamoda, Namshi and Zalora will be even more effective in expanding their leadership positions in their respective marketplaces,” said Lorenzo Grabau, CEO of Kinnevik.
Since their respective launches in 2011 and 2012, the five e-commerce companies have attracted funding in excess of EUR1 billion from Kinnevik, Access Industries, Summit Partners, Verlinvest, Ontario Teachers’ Pension Plan, Tengelmann and a number of other investors.