Taking on Amazon: Flipkart-Myntra Merger
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Case Code: BSTR464 Case Length: 19 Pages Period: 2007 - 2014 Pub Date: 2015 Teaching Note: Not Available |
Price: Rs.500 Organization: Flipkart, Myntra Industry: Online Retail Countries: India Themes: Merger and Acquisition |
Abstract Case Intro 1 Case Intro 2 Excerpts
Introduction
It was midsummer in 2014 in India when the country’s leading e-tailer Flipkart made the hottest and most awaited announcement of the Indian e-commerce industry – the acquisition of Myntra, its rival and leading e-tailer in the fashion and lifestyle segment, a vertical in which Flipkart was lagging behind its competitors. On this occasion, Sachin Bansal (Sachin) and Binny Bansal (Binny), co-founders of Flipkart, said, "We believe that the future of fashion in India is e-commerce. Myntra has a strong team with excellent domain knowledge. They also have the best relationships with lifestyle brands. This partnership will strengthen both our positions in the fashion space. We will continue to work as independent entities and grow together as leaders in the Indian fashion and lifestyle industry.” Arvind Singhal, Chairman of Technopak Advisors Pvt. Ltd., said, “The Flipkart and Myntra merger will create the first Indian e-tailing powerhouse, and provide a big fillip to India's still nascent but very promising e-commerce industry."
However, not all experts were of the same view. Mahesh Murthy, co-founder of Seedfund , said, "While this (deal between Flipkart and Myntra) may be good for investors, it might not be so good for the entrepreneurs and staff of these companies." Swati Bhargava, cofounder of Cashkaro.com , said "...Consolidation of top two out of five players is probably not great from a customer perspective. It reduces competition and perhaps incentive for continual improvement".
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