Snapdeal, the home-grown online retailer, has acquired luxury fashion portal Exclusively.com for an undisclosed amount, expanding its presence in the high-end fashion segment.
Snapdeal, which gets a little over US $1 billion in gross merchandise value (GMV) from its fashion business, expects the figure to touch US $2 billion by the end of 2015 with this acquisition.
According to industry insiders, Snapdeal's total GMV - total value of goods sold - is around US $2 billion at present and fashion business accounts for over 60 per cent of the total volume.
Quoting a KPMG-Assocham report, the homegrown e-commerce comapny said luxury products and services is a US $14 billion market in the country, growing at 30 per cent year-on-year, with more than 70 per cent consumers willing to shop for luxury products in the domestic market than abroad.
"With this acquisition, Snapdeal looks to further strengthen its fashion business and reach US $2 billion in GMV in the fashion category this year," it said in a statement.
The acquisition of Exclusively is similar to that of Snapdeal's rival Flipkart acquiring online fashion retailer Myntra for an estimated Rs 2,000 crore deal in May 2014, marking it the biggest consolidation in the domestic e-commerce space.
Commenting on the announcement, Snapdeal Co-Founder and CEO Kunal Bahl said, "Snapdeal has always operated ahead of the curve in the e-commerce space, especially when it comes to category leadership."
Bahl added that there is a surge in demand from consumers across the country for premium and luxury products, however, access to luxury brands is severely limited in the country.
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The company has brought Exclusively to provide its over 40 million users access to the widest range of aspirational, high-end products and services.
"Under this partnership, Exclusively will complement Snapdeal's existing ecosystem and will provide a consolidated offering for the luxury and lifestyle shopper, making it India's first online luxury mall. Luxury and premium fashion brands from across the world can now open stores in Exclusively?s online luxury mall," the Snapdeal CEO said.
Exclusively will continue to function as an independent site and all aspects of Exclusively's online shopping experience will remain intact, with new collection and service augmentations in the pipeline, the e-commerce major said.
Snapdeal expects the luxury products portal to reach a GMV of US $100 million by 2015-end and US $1 billion in the next three years.
Exclusively today retails hundreds of the country's leading designers on its site, including Manish Malhotra, Tarun Tahiliani, Manish Arora, Anita Dongre, Rohit Bal, JJ Valaya, Ritu Kumar, Varun Bahl and Neeta Lulla.
In 2015, Exclusively plans to launch leading international luxury brands and designers on the site.
A Snapdeal spokesperson said post this acquisition, Exclusively Co-Founders Mohini Boparai Guleria and Sunjay Guleria will join the Snapdeal family as General Manager - Creative & Catalogue and General Manager - Business at Exclusively.com, respectively.
Snapdeal had forayed into the designer wear category in October 2014 with the launch of 'The Designer Studio' and this acquisition will further strengthen its presence in the luxury and premium products space, she added.
The move comes in the backdrop of online marketplaces like Flipkart, which are flush with cash from investors, expanding their presence with acquisition of firms in niche categories.
Snapdeal has so far raised over US $1.5 billion from a clutch of investors that include Japan's Softbank and Ratan Tata, among others.