India’s largest online retailer Flipkart.com is in the finalising stages to acquire fashion retailer Myntra.com. As per the official sources at both the companies said the deal, which will be a combination of both cash and stock, is scheduled to be announced tomorrow.
In what could be seen as an early phase of consolidation in the 62,000-crore e-commerce market, India’s largest online retailer, Flipkart.com, has acquired fashion e-retailer Myntra.com.
If we look at the exact deal between Flipkart and Myntra it could anywhere be pegged at1,800-2,000 crore as per the industry experts. Flipkart has had limited success with apparel and fashion accessories, the largest shopping categories in the online retail space.
According to a Technopak Advisory report, by 2019, the electronics and fashion segment will account for 30 per cent of the sales in the online e-commerce space. However, it is not yet clear if Flipkart will acquire only the Myntra brand or its overall operations.
According to market experts, the deal will help Sachin and Binny Bansal’s Flipkart garner a larger market share and give tough competition to Amazon, the Seattle-based e-commerce giant.
The transaction is said to have been initiated by common investors, Tiger Global Management and Accel Partners, which are understood to own majority shares in both the companies.
Sources say that while Sachin and Binny own less than 10 per cent of Flipkart, Mukesh Bansal owns around 6-7 per cent in Myntra. The deal could also see an exit by a few investors in Myntra.