Flipkart and Myntra close to e-commerce merger deal
Although talks of a potential merger between Flipkart and Myntra began back in January, it has been reported recently that the companies are now close to closing a deal. According to TechCrunch, the companies are in the last stages of the deal, with Myntra valued at $330 million and Flipkart valued at approximately $2.5 billion.
Founded in 2007, Flipkart became successful by making e-commerce popular in India. The company started by selling books, and then expanded to offer a wide variety of products, including toys, movies, games, personal products, electronics, apparel and more, and today is India’s largest e-commerce company. Myntra is the fastest growing e-commerce retailer in India for fashion and lifestyle products and each of these companies are two of India’s most funded e-commerce startups. They also share a few of the same investors.
With the acquisition of Myntra, Flipkart could be in a position to present serious competition to major e-commerce players like Amazon and Snapdeal. However, people close to the company told TechCrunch that the deal could be experiencing delays because of jurisdiction issues, meaning it could be a month or more for the deal to be finalized.
It is estimated that over five years, the e-commerce market in India will grow to be seven times its current size. It is estimated to reach close to $8.5 billion by 2016. According to eMarketer, the e-commerce market is expected to generate $1.5 trillion in global sales in 2014, with B2C ecommerce sales expected to increase by more than 20%. Some of the reasons cited behind this growth include advances in payment and shipping options, movement into international markets by major brands, and expanding user bases online and on mobile devices.