Flipkart Acquires Country's Biggest Fashion Portal, Myntra
Flipkart Acquires Country's Biggest Fashion Portal, Myntra
Flipkart which is the largest online retailer in India acquired the nation's biggest fashion portal Myntra. As Amazon Inc's rapid expansion is creating a flutter in the e-commerce industry, Flipkart seems to be moving ahead in the game. Financial details regarding the deal were not disclosed. The deal has been estimated to be around $250 to $300 million by some sources, according to media reports.
Flipkart has been set up by 2 ex-employees of Amazon, founders Sachin and Binny Bansal in the year 2007. It has established a strong foothold in the online shopping industry. With this step, the online retailer looks set to make waves in the fashion industry.
Amazon entered the Indian market in June 2013. It has offered facilities such as lowered prices, next day delivery, additional product categories and strong ad campaigns. The increase in competition is making it tough to acquire fresh capital and cope with lowered prices and many small e-commerce companies are now joining bigger rivals.
Around 18 of the 52 e-commerce start ups in India were able to get follow-on investments in the last year, according to prominent investment banks. Retail consultancy Technopak has also indicated that many small firms now face the possibility of being acquired by larger companies.
As per media analysts, companies looking for a larger slice in the online retail market include Flipkart, Snapdeal, Jabong and international giants such as Amazon and eBay Inc. Amazon is also looking to acquire smaller firms in India.
The Indian e-commerce space is expanding very rapidly. It is estimated to be worth $13 billion in the year 2013. Online travel companies have a lion's share of the market with over 70% of consumer transactions.
Online sales of retail goods added up to $1.6 billion in 2013 according to research firms which have estimated that it will reach $76 billion in the year 2021. If the online e-commerce industry has to be studied closely, China is the clear leader with business and e-commerce sales said to go beyond $180 billion. The leading e-commerce firm here is Alibaba.
Flipkart is based in Bahalore and it aims to invest over $100 million in the fashion industry over the next 12 to 18 months. Private equity investors such as Accel Partners and Tiger Global Management have also invested in Flipkart and Myntra.
Myntra sells products from brand such as Calvin Klein ad Adidas and it is an important e-commerce player in the fashion retail industry. According to co-founder Sachin Bansal, both Flipkart and Myntra will operate independently.
Snapdeal is also carving its own path and rasing funds from investors such as Temasek Holdings (Private) Ltd. Developments in India's e-commerce space are pointing to changes in the way that people see shopping. Online shopping has a lot of advantages and customers are clearly looking to encash on this. E-commerce has tremendous potential. Corporate leaders such as RIL are also looking to hop onto the online retail bandwagon. With payoffs for the company and the customer, this clearly is a win-win situation for all.
