Global Fashion Group has been formed to offer an online international fashion service across emerging markets worldwide.
Things are heating up in global online fashion and, in emerging markets, they are reaching boiling point. The element generating that heat is Global Fashion Group (GFG), a merger of India’s Jabong, Latin America’s Dafiti, West Asia’s Namshi, Russia’s Lamoda and Southeast Asia and Australia’s Zalora.
Once this newly formed group of online fashion platforms goes live in April it will become one of the biggest internet empires outside the US and China, placing it on the same billing as Amazon or Alibaba. Rocket Internet, backed by investment companies Access Industries and Kinnevik, is behind the venture.
When combined, the five portals will have 4.6 million active customers and generate $463m (£310m) in gross merchandise volume (GMV) annually. The three businesses will hold a 56% stake in GFG.
Strength in unity
Forming this entity is an entirely sensible move. Not only will it cement GFG as the leader in emerging markets, but better enable it to battle rivals as competition intensifies in more established ones.
Rocket Internet has a proven track record of taking successful models to new, under-served or untapped markets, and scaling them into online powerhouses. Its proprietary technology is highly flexible and scalable.
This provides a huge competitive advantage to the businesses in which it invests. The creation of GFG will leverage this, creating significant cost savings and operational efficiencies that will better enable them to respond quickly, making them more agile in what is a rapidly growing landscape.
More than this, the merging of these entities on one platform will provide significant synergies in terms of networks, suppliers, solution providers, customers and employees. The players involved will also benefit from being better enabled to introduce zonal pricing and promotions, tailored range assortments and broader brands and private labels through common sourcing.
GFG is well placed to fully exploit the opportunities provided, granting the five etailers access to 23 countries, enabling them to build scale internationally quickly, efficiently and profitably. Furthermore, the five companies under the GFG umbrella do not represent the entirety of businesses in which Rocket has an interest.
Nigeria-based fashion portal Jumia and Indian homewares site FabFurnish could also be brought into the fold at some later date. Specialists looking at international growth and established ecommerce giants hoping to tap into online fashion need to keep an eye on GFG, as a new global online fashion powerhouse might just be emerging.
- Malcolm Pinkerton, research director, Planet Retail
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