Flipkart’s Acquisition of Myntra

Flipkart's Acquisition of Myntra www.ambitionias.com
  • In what is being touted as the biggest e-commerce merger in India, Flipkart announced its acquisition of fashion e-tailer Myntra. The move is seen by some as:
    • To counter the growing sales of Amazon and Snapdeal in India.
    • Scaling up, increasing market presence and dominance that translates into profitability.
  • What makes the acquisition stand out among the rest of the e-commerce mergers happening currently is that this is not driven by distress, as both companies are currently thriving on their own.
  • Both companies will still run independently, with no merging in the fashion business or content of the two portals.
  • While Myntra alone holds 30% of its market share, together with Flipkart it holds 50% of the market share.
  • Myntra CEO Mukesh Bansal will now join Flipkartā€™s board and head fashion business at both the portals. Myntra employees will remain in current position, and stock options in Flipkart will be offered to them.
  • In terms of transactions, fashion segment will rule the market. Flipkart is going to invest $100million in this segment hoping to translate that into the largest sales segment.
  • Although FDI in e-commerce is cropping up, it is speculated that over time the battle is going to be between the domestic players alone.
  • Read at:http://www.thehindu.com/todays-paper/tp-business/flipkart-buys-out-myntra-for-300-m/article6038878.ece
  • http://www.thehindu.com/todays-paper/tp-business/in-the-longterm-battle-will-be-between-the-domestic-players/article6038877.ece