The turf war between $7-billion homegrown e-tailer Flipkart and $165-billion global major Amazon to wrest control of the Indian e-commerce market may lead to acquisition of companies with niche capabilities. Flipkart co-founders Sachin Bansal and Binny Bansal, basking in the glory of a $1-billion fund infusion, have already asserted that Flipkart will look to acquire companies with niche capabilities in fashion, robotics, mobile technology and apps, besides improving the seller ecosystem.
“We are looking into the seller side of things. There are a large variety of services like quality, which we can solve using technology. That is somewhere we will definitely invest,” Sachin Bansal had told FE. “We will also invest and experiment in the devices and private labels space, besides investing in a lot of categories like small appliances, tablets, accessories,” Binny added.
Last week Amazon appointed Abhijeet Muzumdar as head of its corporate development and private investments, sources said.
Muzumdar was earlier vice-president of Bessemer Venture Partners, an investor in Snapdeal. One person privy to the development said the move underpins Amazon’s intention to outrun Flipkart. Besides, Amazon will also form a joint venture with Infosys co-founder Narayana Murthy’s Catamaran Ventures “to help offline sellers and SMBs sell their products online”.
“We are investing in enhancing the experience and the mobile platform. Our mobile traffic has increased to 25% in 12 months. Our mission and strategy is exactly the same as we have everywhere else,” said Amit Agarwal vice-president and country manager, Amazon India
Not to be left behind, Snapdeal, Flipkart’s nearest domestic rival with over 30,000 sellers on its marketplace, appointed Abhishek Kumar its head of corporate development last week. Kumar will be responsible for mergers and acquisitions and future investments by the company. While Flipkart had recently acquired fashion e-tailer Myntra for $370 million to cement its position in the high-margin fashion space, Snapdeal had acquired Doozton.com, an online product discovery platform focused on fashion and lifestyle.
Industry watchers say pressure will be on Snapdeal to raise more funds and scale up operations. So far, Snapdeal has raised $410 million, one-fourth of Flipkart’s $1.75 billion. “Snapdeal has two options — raise funds or go for an IPO. It’s likely that Snapdeal will look to raise one more round before going in for an IPO. But, they may have a hard time raising a large amount. I assume they will look at anything between $300-500 million. Otherwise, they will find it hard to