Flipkart Acquires Myntra to Grab Major Share of Online Trade
Flipkart, India's major ecommerce company has accquired online fashion player Myntra for an approximate amount of Rs 2000 crore in a bid to grab larger portion of marketplace and also to compete with fast growing Amazon India.
Ecommerce major Flipkart acquired Myntra.com, one of India's biggest online fashion store for an unverified amount of over Rs 2,000 crore or US $330 million. Even though both sites will operate separately, Mukesh Bansal, founder of Myntra will become head of the fashion business of both Myntra and Flipkart. However, Flipkart will continue to sell fashion products as usual.
According to reliable sources, the merger deal was worked out in early April but both Flipkart and Myntra took time to finalize the deal structure to make sure that it is compliant with Indian laws and regulations.
Industry experts are of the opinion that Flipkart and Myntra merged to compete with the aggressive campaign of Amazon India as many believe that Amazon has grabbed a major share in the online retail space. As of now, Amazon has been providing tons of products under various categories with the excellent delivery system in place.
"This acquisition helps us grab a bigger market share and compete better," said Binny Bansal, Flipkart co-founder.
Myntra was working very well before the merger as they have the reputation of quick delivery of products. It remains to be seen as to whether Myntra will be able to retain the credibility of their existing clients post-merger.
As per the deal, the existing employees of Myntra will continue to work as usual and there will be no layoffs. However, they will have an option to choose stock options from Flipkart.
Before acquisition, Myntra was delivering products to Kerala. However, they have now stopped shipping to Kerala and the following message will appear if you attempt to order using kerala pincode.
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Pincode not serviceable
Unfortunately, we do not ship to your PIN Code!
We are continually expanding our delivery network but there are still some parts of India that we cannot deliver to.
We will strive to be able to reach your PIN Code soon!
Myntra has been a familiar destination for textiles and footwear of all major brands for consumers who are unable to find similar kind of products in offline retail stores or having difficulty in locating such items in traditional shops.
