At The Times When E-commerce Acquisitions in India Go Unbounded
August, 11th 2015
On their path towards expansion, e-commerce players in India are looking out for mergers and acquisitions in order to expand their businesses. They always want to improve their cash-intensive sector by conglomerating with the apt technology and capability. And why not, the eCommerce Industry in India is still at the nascent stage and players have just scratched the surface. By the end of 2014, online retail sales in India had clocked at $5.3 billion – mere 0.7% of total offline retail sales. Despite the humongous growth, deep internet penetration, and hundreds – if not thousand – of M&As, the eCommerce Industry in India will only be able to eat 1.4% of total retail sales by 2018.
In the first half of 2015, 34 M&A deals took place in the industry. This is 3X than the number we recorded in the whole year of 2014. 11 deals alone that took place in 2015, valued of a total $776.25 million while four others were worth $324.35 million. That means 15 out of 34 acquisitions happened between January and July were worth more than $1 billion. Interestingly, all the 11 M&As that took place last year fetched a total valuation of mere $387.4 million. This is a clear indication of flourishing e-commerce startup scenario in India. Startups’ valuation has increased multi-folds in just one year and investors are ready to buy the startups at roaring valuation. For many this could lead to a question if the Indian startups ecosystem is highly overvalued and, are we heading towards another bubble bust? That is a different debate altogether and we have attempted the topic in a different well analysed article.
In 2014, we witnessed a successful wave of mergers and acquisitions happening in e-commerce industry in India. The industry was fortunate enough to keep the momentum in 2015 too. The major players of the industry, Flipkart and Snapdeal are looking forward to expanding in a way to improve the customer base and provide them with better user experiences. For that purpose, they always adopt the method of strategic acquisition.
The year of 2015 started with acquisitions especially the first 5 months. Can you believe that? Let’s have a look at the major acquisitions that happened this year. In addition, we shall find out their upcoming plans to prosper in their business.