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MUMBAI, India — Flipkart, India's largest multibrand online retailer, agreed to buy competitor Myntra.com as it seeks to widen its lead over Amazon.com Inc. in the country.
Flipkart will buy 100 percent of Myntra, Chief Executive Officer Sachin Bansal said at a press conference in Bengaluru today. Flipkart and Myntra will continue to work as independent entities, according to a press release. The two companies didn’t immediately provide a value for the deal.
The purchase gives seven-year-old Flipkart access to Myntra’s customers and suppliers strengthening its position as the online retailer fends off competition from EBay Inc. and Amazon. India’s Internet retail market is estimated to expand sevenfold to $22 billion by 2018, according to CLSA Asia-Pacific Markets.
“What it does for Flipkart is that it kind of breaks into a segment which is not a historic stronghold,” Niren Shah, managing director at Norwest Venture Partners’ Indian unit, said before today’s announcement. “And this by the way is a very critical segment, because it has huge margins.”
Flipkart had a 4.9 percent share of the 170 billion rupees ($2.9 billion) worth of Internet retailing transactions in 2013 according to Euromonitor International estimates in a March report. Myntra controlled a 4.1 percent share, while Amazon and EBay had 1.6 percent and 1.2 percent respectively.
By Adi Narayan; Editors: Stephanie Wong, Subramaniam Sharma, Suresh Seshadri
