Flipkart's shopping cart just got heavier. The largest e-commerce player in the country has bought out the second largest e-retailer in electronics, Letsbuy.com. The deal is a combination of cash and equity and the value of the deal is estimated to be around $25 million. Now, Flipkart will have a wider and deeper catalogue of electronic products.
Letsbuy.com was started by Hitesh Dhingra and Amanpreet Bajaj in 2009. It has strong relationship with over 400 brands in this category. It gets 5 million monthly visits and ranks among top 200 websites in India.
Speaking about the acquisition, Flipkart's co-founder and CEO Sachin Bansal said in a statement, "This acquisition fits into our strategy of building dominant shares in all categories we operate in. We are already leaders in the books and media verticals. Given that we managed to build a leadership position in consumer electronics as well since its launch in early 2011, it made sense for us to consolidate when we saw this opportunity. This acquisition opportunity came at a very attractive price for us and the timing has also been ideal."
This is the fourth acquisition made by Flipkart. The company had acquired WeRead in 2010 a social book discovery tool and in this year Mime360, a digital content platform company and Chakpak.com, which is a bollywood news site that offers updates, news, photos and videos. Flipkart had acquired the rights to Chakpak's digital catalogue which includes 40,000 filmographies, 10,000 movies.
"Letsbuy.com has experienced a phenomenal growth in the last one year and holds a dominant position in e-commerce industry in India. We believe that our expertise in 3Cs (Corporation, customers, competitors) category matched with Flipkart's superior technology and supply chain could be a killer combination," said Letsbuy.com founder & CEO Hitesh Dhingra in a statement.
With Amazon, the US online retail giant making its foray into the country with the launch of Junglee.com, this move from Flipkart is seen as a move towards consolidating their position in the market. But Saloni Nangia, the Senior Vice President of the Retail Consulting Division at Technopak differs. "The industry is set to grow 100 times in the coming 10 years. There is space for both Amazon and Flipkart. We will see many more companies coming into the scene. This is just the tip of the iceberg."
Flipkart, recently had raised $150 million in its fourth round of funding from existing investors Accel Partners and Tiger Global Management. Established in 2007 by two IIT Delhi graduates Sachin and Binny Bansal, Flipkart with its headquarters in Bangalore was started as an online bookstore, but has since diversified into media, consumer electronics, computers, healthcare and home appliances. The site ranks among top 30 in the country, as per Alexa rankings and gets around 12 million visits every month.
It will be interesting to see what happens in the e-commerce space in the coming months.