Jabong’s Fade-Out: A Cautionary Tale in Indian E-commerce

✍ By Sarthak Jain | 🌍 India | 📅 Wed Oct 22 2025

Jabong’s Fade-Out: A Cautionary Tale in Indian E-commerce

During the e-commerce boom of 2012-16 in India, many online shopping companies had started offering their services. Among these, one of the most successful players was Jabong. It was one of the companies which blew up overnight. The reason- huge discounts. In a competitive landscape dominated by players such as Amazon, Flipkart and Myntra, Jabong became the fan favourite. It had the second largest number of visitors in India. It had really low churn rate and great brand recall. With 14000 orders daily of which 60% were from small town, it seemed Jabong had successfully navigated the intricacies of Indian consumer market. Moreover, amazon had offered approx. 1.2 billion dollars for the company. So, what went wrong? As we can see the USP of the company is that they are cheaper than their competitors. And time and time again, we have seen that, a company cannot be run sustainably by just selling cheap. The company started to face trouble in 2015. It had offered it’s customers steep discounts which had appealed the Indian audience. It had also started to offer same day delivery in Delhi. However, this had caused the losses to more than double during that time. Now the cash crunch started to cause operational delays which started to affect their services. Now you might be wondering, why the investors were not infusing funds into the company. Jabong’s go to investor was Rocket Internet, a German company investing in startups of emerging markets. However, Rocket Internet’s business model was not helpful for Jabong. You see, Rocket Internet would invest in start ups and earn money from them during their growth stage. Then, they would eventually sell it off to the market leader thus exiting the market and making money in the process. As things started to go south for Jabong, Rocket Internet backed out and thus exited the company. Amid the chaos, the helm of the company started to leave the company along with the cofounders. Moreover, customer loyalty and traffic dropped drastically as the company was forced to raise prices. This is because, during the boom, people were not attached to a company. They would horde to any platform offering cheaper services. Finally, Jabong was sold to Flipkart for 70 million but decided to pull the plug in 2019 when its losses were too great to be ignored. Jabong with its huge losses was never a “good” business, and hardly had any differentiating factor. There was a constant external pressure to move fast & scale, which set them up for failure.