Marking the biggest consolidation in the e-commerce space in India, homegrown e-retailer Flipkart has acquired online fashion retailer Myntra in an estimated Rs 2,000 crore deal.
While the companies did not disclose the deal size, sources suggest the deal could be worth about Rs 2,000 crore.
"It is a 100 per cent acquisition and going forward, we have big plans in this segment. Flipkart and Myntra are getting together to create one of the largest e-commerce stories and together we will dominate the market," Flipkart co-founder and CEO Sachin Bansal told reporters here.
Asked about valuation, the companies declined to comment.
"We, at Flipkart, believe that we want to be leaders in every segment and fashion is a category of the future, this acquisition will help us become leaders in this category," he said.
Sachin said Flipkart will invest USD 100 million (around Rs 600 crore) in its fashion business in the near-term.
Flipkart, which started in 2007 as an online bookstore, sells products across categories, including fashion and electronics. It also sells white goods and furniture.
The move is expected to help Flipkart strengthen its apparel portfolio and compete more aggressively with peers like Amazon and Snapdeal.
Myntra will continue to operate as a separate entity with its co-founder and CEO Mukesh Bansal joining Flipkart board and heading the fashion business.
"It was very essential to keep Myntra a separate entity and preserve its culture. I'm here for the long haul and we will continue to grow in the market," Mukesh Bansal said.
Speaking about the Flipkart-Myntra deal, Suchi Mukherjee, CEO & Co Founder, LimeRoad.com, said: "The sequence of events in the Myntra fund raise journey and the Flipkart merger make two things clear (1) the lifestyle segment in online commerce is attractive on size, economics and margin pool relative to electronics etc, traditionally the mainstay of Flipkart - the merger therefore makes Flipkart's pro-forma economics better.
(2) building a real online lifestyle brand of size is hard work, and in the absence of anything other than discounts, takes a ton of cash to build. No one has truly won the hearts and minds of Indian users and this presents a huge opportunity for businesses like LimeRoad that are fundamentally product-centric, deeply differentiated and driven by organic growth."
India's e-commerce market has seen huge growth in the past few years as more people log on to the Internet to shop. While apparel and electronics are bestsellers for most e-commerce