Fashion and lifestyle e-commerce portal Jabong is reportedly in talks to sell stake in the company to India's second largest online retailer Snapdeal.
Global Fashion Group (GFG), the owner of Jabong, has been on a hunt for a buyer for a while now.
Replying to a query whether Jabong had approached Snapdeal for a stake sale or not, Snapdeal co-founder & chief executive Kunal Bahl said that "the company was almost always approached by those wanting to raise money in the market."
"At any time, anyone who wants to look at raising money in this market, or is thinking about getting a strategic partner on board, comes and talks to us. We are always considering companies in every space because it is important for us to keep growing our ecosystem. The specifics, though, I can discuss later," he told Business Standard.
While Flipkart's acquisition of Myntra strengthened its presence in online fashion retailing, Snapdeal is yet to find a partner in the segment.
In order to boost its online fashion retailing, Snapdeal may like to have a partner and consider Jabong, according to the sources.
"Adding a fashion portal would help Snapdeal tackle Myntra in a major way. However, talks are at a nascent stage," said a senior official, requesting anonymity.
Sources said that Jabong had begun considering stake sale following a rapid rise in losses.
Jabong recorded a five-fold increase in losses to ₹160 crore during the calendar year 2014 due to high discounts on its offerings, although its revenue growth went up by 136% to ₹811 crore.
According to sources, online retailer Amazon India's discussions with Jabong last year to acquire the firm were unsuccessful on the grounds of valuation. Jabong reportedly asked for a valuation of $1.2 billion.
Last week, The Economic Times reported that Rocket Internet was looking to sell its top e-commerce firms Jabong, Foodpanda, and FabFurnish amid intensifying competition in the Indian online retail sector.