Flipkart To Buy LetsBuy.com

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HailStonE

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Update: Our sources suggest that LetsBuy’s valuation was between $20-25 million. Another suggests that it is upwards of $25-30 million, depending on the payout.

Earlier today: Flipkart is set to buy LetsBuy.com, MediaNama had learned from multiple and reliable sources. The terms of the deal are not known, and at the time of filing this report, we’re awaiting a confirmation from Flipkart co-founder Binny Bansal. The deal is expected to be announced over the next couple of days.

Manish Vij, the co-founder of the Vun Network, and one of the early investors in Letsbuy declined to confirm or deny the development to MediaNama, saying that “LetsBuy is the second largest player in the country, and is the strongest competitior to Flipkart. From a comscore standpoint, it has 2 million unique and over 5 million visitors every month, and is among the top 4 commerce sites in the country. The company has options on raising funds as well, but is considering its options as of now.†Until recently, the rumor was that Flipkart was looking to buy a company in the luxury e-commerce space.

The buzz among the investor community has been that LetsBuy has been looking to raise money for a few months now, and in October 2011, there was a report in VCCircle, stating that that it was close to raising around $40 million from multiple investors including Sequoia Capital and Matrix Partners. It has been a little over a year since Letsbuy raised $6 million from Helion Ventures, Accel Partners and Tiger Global. Note that Flipkart and Letsbuy have common investors in Tiger Global and Accel Partners. LetsBuy was launched in July 2009, and primarily focused on retailing consumer electronics, communications and computer goods, though it expanded its product portfolio to include toys, sports, healthcare, watches and stationary. The company was founded by Hitesh Dhingra and Amanpreet Bajaj.

Flipkart is believed to have recently raised funds: a report in Mint suggested that the company had raised $150 million at a valuation of around $850 million. From what we hear, the LetsBuy acquisition might be a part-stock, part-cash deal. LetsBuy is believed to be doing around Rs 150 crore annually, while Sachin Bansal had told Mint that Flipkart is going to close this fiscal with revenues of Rs 500 crore.

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To us, this acquisition would mark the beginning of a consolidation in the e-commerce space in India, which we’ve heard is struggling for consumer loyalty, but also perhaps give Flipkart a fillip in terms of scale, with two of the relatively larger players combining. To scale, e-commerce businesses would require substantive funds over the next couple of years, and not all companies may be able to raise that kind of funding. It’s going to be a last-man-standing game, and competition will increase particularly with the entry of Amazon.com in India. Size will matter.
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Source : - http://www.medianama...ipkart-letsbuy/
 
I too read this article just a minute ago .. Shocking indeed !! Flipkart preparing to take on Amazon ?
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So this means a total blackout of discount coupons from Letsbuy too.
 
Flipkart raising fund but not coupon
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Whatever Letsbuy / Flipkart / abcdx we want quick and safe delivery with decent after sale services.
 
IBN Live: Flipkart to finalise LetsBuy.com buyout deal

Mumbai: A report in MediaNama comes in as a confirmation to floating rumours, and it is true that popular online retail brand, Flipkart has bought LetsBuy.com for an undisclosed amount.

Although the terms of the said deal haven't been disclosed, the report in an update stated that "LetsBuy’s valuation was between $20-25 million. Another suggests that it is upwards of $25-30 million, depending on the payout."

However, some sources still deny to confirm any news, stating that, "LetsBuy is the second largest player in the country, and is the strongest competitior to Flipkart. From a comscore standpoint, it has 2 million unique and over 5 million visitors every month, and is among the top 4 commerce sites in the country.

The company has options on raising funds as well, but is considering its options as of now." However, reports also state that LetsBuy was looking around to raise money, and in October 2011, according to some reports, LetsBuy had almost managed to raise some $40 million from investors like, Sequoia Capital and Matrix Partners.

http://ibnlive.in.com/news/flipkart-to-finalise-letsbuycom-buyout-deal/228592-11.html
 
This is interesting news, I think with Amazon coming in, FK needed to consolidate their position, and this buyout makes sense for them.
 
Employee in Amazon tells me will not enter unless you approve the FD in retail.

Junglee is not what Amazon plans for India he says.
 
Hard to believe i am ranting about this.. but.. Coupons gone..
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The wait/hope for the coupons was more interesting than encashing them.

Also, competitive pricing was something to cheer about between these two.

Good old days.. Sigh..
 
I see this as end of any e-commerce sites in india . Even if amazon comes into india if they failed to provide competitive prices , it will be as good as dead in a few weeks from launch .
 
I wonder what Flipkart is getting from the deal though?

If they eliminate letsbuy and hike prices, new players will come in

If they dont hike prices, instead of buying letsbuy, they could spend a fraction of the money on promotions and get a large no. of customers from letsbuy
 
I am unable to understand when you say that "its end of e-commerce"
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How come it is end to it? Consolidation is there in every industry and it grows as industry grows and it does not at all means that the industry is doomed.
 
boo filpkart, they keep pricing on high and never see good deal..

only god thing about them is faster shipping, and an okayish customer care.

LB had good deals at times, but bad with CC and shipping
 
Some numbers..

LetsBuy : Customer Acquisition Cost Vs.ARPU Data

Data #1: ARPU

LetsBuy’s highest selling product was memory cards and 65% of the orders placed were of size less than Rs. 300 price.

Data #2: Customer Acquisition Cost

On an average, LetsBuy average customer acquisition cost was Rs. 750/.

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Add delivery cost etc, do the math and you’d know why ecommerce is a game that either needs deep pockets or you’d need to sell high value products. (we aren’t talking about margins yet).

Source
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Letsbuy is a good site and a great competitor, buying letsbuy eliminates competition to a large scale for flipkart but for consumer point of view, it's a dealbreaker. As of now, no other e-commerce site is close to them in terms of quality, price and fast shipping combined. So unless amazon takes a proper leap flipkart stays unchallenged
 
bad deal imo. flipkart would be better off not purchasing a site that has lots of negative reviews on shipping and customer support. they could have spent the money in other ways like reducing their prices by 100-200 bucks or by increasing product availability.
 
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