Flipkart buys Myntra : What the industry has to say

Both Flipkart and Myntra, since their inception, have seen a growth that every startup aims to achieve in the eCommerce space. They have been successful in luring not just the investors, but also the Indian consumer, which is now getting confident in buying online.

A few experts of this nascent industry had some comments and views to share on this ‘historic’ deal, these are mentioned below.

1) Mukund Mohan, Director at Microsoft Ventures

I think the big story is that Flipkart and Myntra are taking a spin on offline retailing (unorganized) v/s online retailers like Amazon. That’s the big market. Organized retail in India is about 6-8% of the total retail, and it has not grown profitably because of high costs of rent and labour (among other things). This will change the game dramatically. 

Knowing Mukesh and Sachin well, I think the last thing on their mind will be Amazon. This is about being the biggest retail company in India. To fulfill what BigBazaar and Reliance Retail intended to do. I fully expect them to acquire a grocery retail business in the next 1-3 years. 

This deal sets the course to make Flipkart the largest retailer in a few years, by a wide margin. Like Pantaloons and Big Bazaar have synergised under one company, Flipkart-Myntra to would scale heights by associating with brands that operate in the grocery space.

2) Swati Bhargava, Co-founder at Cashkaro.com

There is no doubt that the deal makes sense from the investors’ perspective as there are many economies of scale to be driven. It readies an ‘Indian answer’ to the massive growth companies like Amazon could see in India if FDI in eCommerce is allowed. Such mergers are a global trend and India is likely to see a great eCommerce story in the next few years.

However, it remains to be seen whether the customer will ultimately benefit from this marriage of 2 of the 5 largest eCommerce brands in India. It could translate into lower prices for shoppers as joint logistics & associated costs could decrease. At the same time, early consolidation and lack of competition could even hurt our still evolving eCommerce economy.

Related Read:  Untapped Potential for eCommerce in Rural India

3) Sandip Shah, Co-Founder and MD at ShopYourWorld

The Flipkart-Myntra merger has been on the cards for a while now and it doesn’t take the retail world by surprise. In fact, this poses the biggest competition to other big players like SnapDeal and Amazon and makes the online market an even more dynamic place to be a part of!

While there have been many successful mergers that have made the eCommerce ecosystem a tougher and more competitive field, there have also been some mergers in the past, like the one between Urban Touch and Fashion and You, that have seen the dissolution of the the former. One needs to wait and watch how turbulent or beneficial this merger is going to prove to be!

4) Ravitej Yadalam, Founder & CEO at Pennyful Online Pvt Ltd

The announcement of the Flipkart-Myntra merger is not only good for the two companies, but for the ecosystem as a whole. It is an exciting time for the Indian eCommerce industry, and this has definitely set the tone for the future.

It is evident that homegrown players are joining forces to battle the e-giants like Amazon and eBay. Competition is driving the ecosystem and creating an unmatched customer experience is the key differentiator today. Ultimately there is going to be only one clear winner: The Consumer.

This merger also gives us a clear indication that fashion as an online shopping segment is blooming and becoming more popular among shoppers.

5) Rajesh Sawhney, Founder of GSF Accelerator and GSF Superangels

Consolidation in eCommerce space is natural. Scale is a big driver of value creation in eCommerce business. In this particular case, common investors are also a big factor behind consolidation.
6) Kiran Murthy, CEO at GetitBazaar
We believe the industry is still nascent and companies are actively investing and looking to acquire/partner with others who have a great product or niche capabilities in eCommerce. We have already started building this ecosystem with our existing relationships with Unbxd, buyingIQ & 99labels and are in discussion with others.
We also tried to reach out to others such as Amazon, eBay, Infibeam, Yebhi and so on, but they denied to give any comments on this.
Alok Mittal, MD at Cannan Partners, adopted a humorous way to avoid his view on the deal saying- Since we are not involved in the merger in any capacity, would like to refrain from being a “begaani shaadi mein abdulla diwana”.
We are also awaiting responses from many others. Will update the article as soon as we receive them.
Twitter Reactions of consumers, industry leaders and media persons
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