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Case Study: How Jabong became most valuable among Rocket Internet’s e-commerce portfolio?

14/07/2015

Jabong1

Jabong was launched in early 2012 by Praveen Sinha as an e-commerce portal to cater the fashion needs of men, women and kids across footwear, apparel, jewellery and accessories.

Jabong has the tag line of “Be You” and caters several categories of branded listings. The founder Mr. Sinha agrees that they were late in entering the fashion e-commerce market. But something differentiated them from their competitors. First, they introduced right brands on their platform, mostly those that were not available offline in many parts of the country. Secondly, they worked with user friendly features like express delivery; 30-days return policy and open box delivery which gave them better customer experience. And, finally, they indulge themselves in fashion curation and thus came closer to the fashion community in the country.

According to a report from internet analytics firm ComScore in September 2012, Jabong.com had the second-highest volume of traffic among Indian e-commerce websites, in just a few months of its launch. The platform counted 1.9 million gross orders in the first quarter of the financial year 2014, according to a disclosure by Kinnevik, an investor in Jabong.

Jabong-orders

The report further indicated that Jabong, in March 2014, had a total customer base of 2.9 million, as opposed to one million in the corresponding month last year. In December 2013, Jabong crossed $25 million in revenue. The fashion e-commerce market in India is currently valued at $20billion and is expected to touch $35 billion by 2020.

The Big Idea of Jabong

Jabong was founded in the year 2011;however it started its operation in January 2012. When most of the e-commerce players were focusing on offering huge deals and discounts on the products, Jabong focused on varieties, increasing categories, widest assortment, express delivery and excellent customer services. This, over time has led to the strong customer base.

jabong fans by country

Business Model

Jabong.com follows both inventory model and a controlled marketplace model. In inventory model, products are sourced from brands and stored in the Jabong warehouse. In controlled marketplace model, Jabong doesn’t store the inventory but takes care of the Fulfillment, customer Service, and Returns if any. Interestingly, Jabong (like any other Rocket Internet business) is built by consulting people, rather than hard core operations professionals.

Marketing Strategies

Currently 90% of the company’s budgets are going towards digital and rest 10% are invested in TV and OOH. Jabong is using digital marketing to enhance the transactions and revenues and social media to increase engagement. Off-line media are used to generate awareness in small towns and cities.

• Jabong used affiliate marketing to add advantage to the business and ran cost per sale (CPS) campaigns with many affiliate networks in India. The payout being offered to the affiliates was upto 10 percent of any sale.This ensured Jabong getting huge number of customers only through affiliate marketing.The sale is processed within 15 days after month end. The payments to the affiliate marketers would be made on the basis of the Final Validation Report and within 60 days of after activity month.

• Further, Jabong distributed shopping vouchers worth Rs 2500 to the users for first sign-up.

• In order to retain its members and make them visit again and again, Jabong adopted an impressive tool that was email marketing. Jabong used to send promotional emails every day to each of their members about new offers for sale. Their E-mailer to registered users talks to customers on the promotional aspect and try to engage the audience to get the click.

Jabong-returning-customers

• Jabong also regularly posted interesting articles on their blogs to increase brand awareness and engagement.

• Jabong utilized Facebook marketing opportunity efficiently. Within few months of their launch, it crossed over lacs of fan following on their Facebook fan page.

• Jabong also used banner advertisement to get new visitors on the website.

• In Jabong’s digital strategy its Facebook page has recently crossed 3.6 million likes, and has 119K+ followers on Twitter. They publish 10-12updates a day and almost all of them are self-promotional but still are able to engage the audience.

• Jabong has used the internet widely to promote its brand. However, they launched its first TV campaign in March 2012.A similar campaign was launched in September 2012. In Feb 2013 Jabong launched a new TVC with tagline “Fashion Nikla Mann Fisla”. In November 2013 Jabong together with Puma launched the digital fitness campaign “Gear up Buddy” with Bollywood actor Chitrangada Singh. Their association with RanbirKapoor and DeepikaPadukone Bollywood Movie YehJawaniHaiDeewani has given Jabong a strong uplift.

Role of Social Media in Marketing

It has a phenomenal presence on Facebook and a good strategy for Twitter as well. Apart from that, it’s also present on YouTube and Google+.

Facebook
The brand is full of self-promotional updates on Facebook. They publish 10-12 updates a day and almost all of them are self-promotional in nature.But still, the page has a fantastic engagement rate of more than 60%!!

jabong fan growth

Jabong’s Facebook Business Page is currently boasting an average growth of 500 likes a daywhich is awesomely good for a brand just 3 years old. This demonstrates company’s seriousness in relation to Social media since inception, which was executed in an extremely thriving manner via aggressive advertising efforts through Facebook.

Twitter
Jabong is doing a good job at Twitter. Not only does it have a friendly tone, it also uses emoticons liberally. It realizes that its primary target segment is young women.
While it does cross-post its Facebook updates, it also uses twitter as an effective platform for addressing customer queries. And again, its communication shines through. Most of their interactions on twitter with regards to customer service end on a happy note.

Success Factor: What contributed in the Company’s success?

Jabong’s successful penetration in the Indian e-tail market is helped by various partnerships. Because of its success, Nike partnered with Jabong and launched its new range of cricket gear on Jabong’s site.
• Widest assortment of products with 1000 brands.
• Innovative services, introduced card processing on delivery.

Funding and Revenue Generation

Jabong raised $100 million of funding in February 2014,out of that, Jabong had raised $27.5 million from British development finance institution CDC, but details of the others who had invested in the round is not available.
Around 62% of online fashion store Jabong’s revenues came from Tier-2 and Tier-3 cities in Q2-FY14. This is probably due to lack of access to premium products in offline stores.Currently, the Jabong portal has been valued at $769 million.

Awards and Recognitions
• Jabong.com won the “Online Retailer of the Year” award in the first eTailing India e- commerce industry awards in 2014.
• Jabong.com received the award for the ‘Most Impactful Launch of the year’ at ‘Pitch Brands 50 Awards 2013.

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