Letsbuy.Com, a multi-category etailer, has been closed, with the traffic being redirected to specific category pages on Flipkart. The company was acquired by Flipkart in the first half of this year for an undisclosed amount. The move forms a part of a 2-step integration strategy by Flipkart where, they first began with integrating the checkout process on Letsbuy and have now closed the site by redirecting traffic to Flipkart.Com.
Generally the most difficult part in acquiring a company is integration between two organizations for which Flipkart had been screening employees for selection and fitment since the buyout, with employees being interviewed for suitable positions in the Flipkart Team. An undisclosed employee said that he was offered a significantly lower salary to join Flipkart (almost 50% cut) and that this was the case for a majority of employees. From an operations point of view, this completes the integration process for Flipkart, which has now fully integrated the back-end as well as the front-end operations of Letsbuy.
The move follows the recent trend of acquirers integrating the site and traffic onto their platforms, such as Snapdeal closing down eSportbuy and Yebhi closing down StylishYou’s site post acquisition. This leaves out HealthKart and MadeinHealth. Iamwire spoke with Prashant Tandon, Managing Director, HealthKart about their strategy vis-à-vis MadeinHealth and their platform. Speaking about their future plans and integration of MadeinHealth, Prashant said, “We would be retaining MadeInHealth as a separate brand, strengthening the e-commerce capabilities and investing further to add more social community features to drive user engagement”.
The industry has witnessed acquisitions and buy-outs by larger players acquiring niche players over the past year, starting with Flipkart buying out Letsbuy, Snapdeal acquiring eSportsBuy, Yebhi acquiring StylishYou and HealthKart acquiring MadeinHealth. While the rest of the acquisitions were strategic acquisitions, executed to increase the product portfolio of the parent company, the Flipkart deal was essentially a strategic consolidation by investors – both Flipkart and Letsbuy had common investors. Put in another way, this was the only deal that had a large company buying-out a direct competitor as opposed to the other deals which were done to extend and increase the product portfolios. Tweeting in response Mahesh Murthy raised the question that, “Flipkart shuts down LetsBuy. Snapdeal shuts down eSportsBuy. Acquisitions were to save investors, not grow business?”.
Letsbuy was started by Amanpreet Bajaj and Hitesh Dhingra in 2009 and received Angel funding from Nitin Gupta (ex-MasterCard) and Manish Vij (Vun Network), before getting funded for $6 million from Tiger Global, along with Accel and Helion Venture Partners. The company struggled to make the business profitable and was able to get acquired as a savior for both its investors and Founders. With the current moves there are numbers of valuable resources of Letsbuy floating around in Industry for Jobs, even when there is a shortage of skillful HR for ecommerce in India.