Mumbai, July 26: Flipkart group firm Myntra has bought rival Jabong in an all-cash deal worth $70 million (Rs 471 crore), pipping Snapdeal, Future Group and Aditya Birla Group.

Flipkart expects to strengthen its position in fashion and lifestyle with the Jabong deal as its main rival Amazon prepares to infuse a massive $3 billion into its Indian operations.

Amazon today launched its Prime delivery service in the country that offers a clutch of convenience facilities for an annual sum.

Rocket Internet-backed Global Fashion Group (GFG) today said it had entered into a definitive agreement to sell Jabong to the Flipkart group. GFG said the transaction was in line with its strategy to focus on the core markets and accelerate on its path to profitability. The transaction is expected to close during the third quarter.

"Following a strategic review of its Indian operations, the GFG board concluded that Jabong's position as India's leading fashion e-commerce destination would be best served through a business combination with a local player. Having reviewed multiple options over a period of several months, the GFG board has resolved to sell Jabong to Flipkart Group,'' a statement said.

Khaitan & Company advised Flipkart on the acquisition.

Observers said Myntra had got a good deal since Jabong was once valued at around $150 million. Jabong was engaged in a stiff battle with Myntra before losing its market share.

For Myntra, the acquisition will bring in more than 1,500 international high-street brands, sports labels, Indian ethnic and designer labels and over 150,000 styles from over a thousand sellers. There are indications that Myntra will not merge Jabong with itself.

"Fashion and lifestyle is one of the biggest drivers of e-commerce growth in India. We have always believed in the fashion and lifestyle segment and Myntra's strong performance has reinforced this faith. This acquisition is a continuation of the group's journey to transform commerce in India,'' Flipkart co-founder and CEO Binny Bansal said.

Amazon offer

Amazon has launched its Prime subscription programme. Users will be able to get free shipping for anything they order with no price cap. They will also be able to secure one or two-day deliveries for free. There will be a 30-minute early access to new deals.

All this will cost Rs 499 per year. For now, there is a 60-day free trial period. This Rs 499 is a Rs 500 discount on list price of Rs 999 per year.