Flipkart, an online retail company often described as India’s Amazon, announced today that it has acquired fellow e-commerce operator Myntra, which specializes in fashion and casual lifestyle products.
Financial terms of the deal weren’t disclosed but Reuters has said the deal is worth about $300 million. The deal is hugely significant, primarily because it combines two rivals into a bigger e-commerce player in India — though Flipkart co-founder Sachin Bansal noted in a conference call that their operations will remain separate. There will currently be no integration in the backend, though both firms will leverage on each other’s technologies.
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“This is about scaling, not about costs,” Bansal said.
It comes likely in response to Amazon increasingly becoming a competitor to watch out for in India. The US e-commerce juggernaut quietly moved into the Indian market last June. It started out selling books only, but now offers music, movies, electronics, fashion and more.
Another US player, eBay also has plans for the Indian market, after it invested in domestic player Snapdeal with a view to a future acquisition. Snapdeal has just raised $100 million from five investors as well, including Singapore’s Temasek Holdings.
Flipkart is currently India’s largest e-commerce platform offering over 15 million products, with over 18 million registered users and 3.5 million daily visitors. It has raised over $540 million since it launched in 2007. Myntra, on the other hand, receives over 50 million visits every month. Earlier this year, it confirmed raising over $50 million in fresh funding.
Headline image via Samrat Mazumdar / Flickr