27 September, 2020

A Deal On The Flip Side

Snapdeal, a sinking ship, will soon be bought over by Flipkart, but only for the sake of investors, not assets

A Deal On The Flip Side

In a little over a year ago, the ­promoters of Flipkart and Snapdeal were engaged in a war of words over who will be a greater force in the fast growing Indian e-commerce market. One year and a lot of ‘Amazon-forced’ developments later, Flipkart is on the verge of ­devouring Snapdeal in a deal forced not by competition or orga­nic growth but by investors looking at justifying their investments in the e-commerce market.

In the last few weeks, the decks have been cleared for Flipkart’s takeover of arch rival and fellow e-commerce major Snapdeal which has been sinking over the last year or so with sales slumping and Gross Merchandise Value (GMV), the primary measuring tool of an e-commerce company’s success, going down significantly. Not only has it not been able to match Flipkart’s growth, it has also become difficult for the beleaguered company to raise any more funds from investors, who are now looking for ­returns on their investment. In April, it reduced office space by 60 per cent. A couple of months earlier, it resorted to...



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