Flipkart, an e-commerce giant headquartered in Bangalore and registered in Singapore, was originally an online book sales platform before diversifying into product categories like fashion, home essentials, and lifestyle products. Flipkart’s competition primarily is with Amazon and Snapdeal. As of October 2020, Flipkart holds a 31.9% market share, making it the largest online retailer in India.
Flipkart’s Acquisition Timeline
Key Acquisitions
2012
Flipkart had acquired Letsbuy for $25 million. Letsbuy.com was founded by Hitesh Dhingra and Amanpreet Bajaj in 2009. It was an online retailer of branded computer technology and digital lifestyle products from top international and domestic brands.
The acquisition fitted with Flipkart’s strategy to have market dominance. The synergy from the deal would allow them to accelerate growth.
2014
Flipkart acquired Myntra for $280 million. Myntra was founded by Mukesh Bansal, Ashutosh Lawania, and Vineet Saxena in 2007. The company has been performing well since its inception. Myntra continues to operate alongside Flipkart as a standalone subsidiary focusing on separate market segments.
The deal mutually benefited both parties as for Flipkart, this would facilitate entry into the online fashion industry while for Myntra, this would provide them access to Flipkart’s logistic network.
2015
Flipkart acquired FX Mart for $6.8 million. The company, founded in 2012, engages in electronic payments, remittance, foreign exchange, and travel-related businesses.
The startup’s prepaid wallet was licensed by RBI and this allowed Flipkart to offer a digital wallet within itself and provided them with an option to cut their expenses of paying to the external wallet providers. The deal let Flipkart increase its proportion of cashless transactions.
2016
Flipkart acquired Jabong.com for $70 million. Jabong was founded by Praveen Sinha, Lakshmi Potluri, Arun Chandra Mohan, and Manu Kumar Jain in 2012. It was a fashion and lifestyle e-commerce portal.
However, in February 2020, Flipkart formally shut it down to shift focus completely on its premium clothing platform Myntra.
Flipkart acquired PhonePe for an amount in the rage of $10-20 million. Founded by Sameer Nigam, Rahul Chari, and Burzin Engineer in 2015, it went live in August 2016, to become the first payment app built on Unified Payments Interface.
However, in Dec 2020, PhonePe partially spun-off from Flipkart to pursue their vision to provide “financial inclusion” to a billion Indians.
2017
Flipkart acquired eBay India in exchange for equity and eBay then invested $500 million in cash in Flipkart. However, after Walmart announced its decision to acquire a 77 per cent stake in Flipkart in May 2018, eBay sold its stake for about $1.1 billion.
eBay’s position at the global e-commerce market helped Flipkart to accelerate and maximize its opportunities and to have a strong hold in the market.
Recent Developments
On January 20, 2021, the Competition Commission of India (CCI) approved Flipkart’s proposal to acquire 7.8% equity stake in Aditya Birla Fashion and Retail – a pure-play fashion and lifestyle company with a strong bouquet of leading fashion brands and retail formats.
Aditya Birla Fashion had approved the issuance of equity shares on a preferential basis to Flipkart for Rs 1,500 crore.
However, it is rumored that The Reserve Bank of India (RBI) and Enforcement Directorate (ED) are yet to launch an investigation into the alleged FDI policy violation in this acquisition Flipkart and ABFRL.