Flipkart To Buy LetsBuy.com

As you can see, Flipkart is gearing up for Amazon. By buying out Letsbuy not only it removed a healthy competitor but also took away an easy way in for Amazon to enter India.

Sorry to get a bit political and off-topic now but imho Amazon will come to India in early 2013 ie after Gujarat elections. Congress does not want BJP to use the FDI issue in the Gujarat elections. Sooner or later the doors need to be opened, the economy needs more fuel Q1 2013 provides an ideal time for Congress to pass the FDI, Gujarat elec will be over so nothing to care about its traders' lobby also it gives sufficient time for the FDI anger to fizzle out in time for the Grand 2014 election.
 
Flipkart acquires Letsbuy, fashion retailer Myntra; raises Rs 100 crore

BANGALORE: Online retailer Flipkart bought Letsbuy, and specialised fashion retailer Myntra said it has raised $21 million (100 crore) on Thursday, both transactions underscoring the rapid evolution of India's e-commerce industry.

Flipkart, one the country's biggest online retailers, said it has acquired smaller rival Letsbuy in a cash and stock deal without specifying the value of the transaction. But people familiar with the matter said it was worth around $20 million.

"This acquisition opportunity came at a very attractive price for us and the timing has also been ideal," Flipkart's cofounder and chief executive officer Sachin Bansal was quoted as saying in a statement. Letsbuy, a seller of consumer electronic goods, has been struggling to raise additional money and was left with little option but to do a deal with Flipkart, a manager at a private equity firm said.

Tiger Global and Accel Partners are both investors in Letsbuy and Flipkart.

"Investors push for such acquisitions as it makes strategic sense for them," said Raja Lahiri, a partner at Grant Thornton.

Online retailers are racing to consolidate their gains as they prepare for the entry of global competition once the government approves foreign direct investment in multi-brand retail. Last week, the world largest e-commerce player, Amazon, made a quiet entry into India through comparison shopping site junglee.com, which it owns. Amazon insists that Junglee is not a trading platform but Indian online retailers believe the writing on the wall is clear.

"Amazon's entry means bigger competition and hence large Indian players will look at strategic opportunities to grow the scale and size of business," said Lahiri.

The online retail industry appears to be coalescing into two distinct types: one that comprises large multibrand retailers and another consisting of specialised sellers of high-margins products such as jewellery and fashion apparel. The successful fundraising by Myntra, a fashion retailer, is an indicator of this trend.

Tiger Global led the round for Myntra with existing investors IndoUS Venture Partners, IDG Ventures India and Accel Partners participating. Myntra has raised a total of $38 million in four rounds, said founder Mukesh Bansal.

Flipkart has announced raising $31 million so far and is believed to be in talks to raise $100-$150 million as it looks to scale rapidly.

"Smaller companies will find it difficult to raise funds unless they have something new to offer," said Sudhir Sethi, a technology investor who is the chairman of IDG Ventures.

Source: http://economictimes.indiatimes.com...-raises-rs-100-crore/articleshow/11829546.cms
 
It was because both of them had same investors and because letsbuy's sales was going down and investors couldn't get much returns the investors decided to merge both of them
 
Letsbuy's valuation is at 3 percent of Flipkart's.
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Flipkart couldnt afford the loss of the feel that India's eCommerce sector is booming. If retailers like Letsbuy keep coming up and going off, people will be wary of buying from them. The only option they had was to buy them out.

Flipkart is also establishing its own logistics and deliver/courier backbone, more users mean move economies of scale.

How good is the decision, that remains to be seen.
 
fk monopoly. the only attractive thing about buying online is the prices and then comes the service . flipkart eliminated one serious competitor by buying it
 
hA1d3R said:
fk monopoly. the only attractive thing about buying online is the prices and then comes the service . flipkart eliminated one serious competitor by buying it
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Its not monopoly man. I feel its a decision taken by both sides.Letsbuy had to raise money and so was the case with fipkart.Flipkart would have raised funds easily compared to letsbuy.Now,If letsbuy operates independently (as per flipkart's press release) then its letsbuy who would gain. Letsbuy using flipkart' s supply chain, its advantage letsbuy.

With amazon coming sooner, letsbuy would have lost its existence. Flipkart's existence may be in danger if they go into the sea with lesser support/funds.Strategy from flipkart looks good.

With more competition its the customer who would get the advantage.

Whether price comes first or service is a personal choice.
 
I am surprised at LetsBuy's valuation. Just 100 crores? I mean these guys were chindi chors or what, as 100 crores is nothing in today's date. Our film stars and cricketers have more money than that.
 
vantheman5211 said:
flipkart has no offers whatsoever.the only thing it provides is good customer service and great shipping.
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Not quiet, Flipkart's sourcing model allows anybody from anywhere in India to buy rare products that are available only in certain Indian cities. This way you get a wider range of products on Flipkart. Very few local megastores manage to match its range. And ofcourse Flipkart's supply chain is easily the best.

agantuk said:
Saves time

More variety available online.

Easy to compare stuff and look up reviews

Price comparison is much quicker

Prices are almost always on the lower side, without the need to haggle

Credit cards accepted.

The end.
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I would rate the ability to research products out (as opposed to being talked into buying something/somebrand you will regret later) and not having to haggle and still get a reasonable price, very highly in this list

xtremevicky said:
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.
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Yup Junglee does'nt seem like Amazon's flagship. Seemed more like a tracer bullet. Maybe Amazon is testing the waters. Anyways Amazon just got an approval from the government yesterday, to setup its own courier service in India.
 
Junglee to me is just a cyber mediary who also sells products.

Its like pricegrabber giving good deals and also selling products it own products.
 
^ Interesting.

Junglee as of now looks more of an Ebay competitor.

Flipkart is just consolidating, every new market segment goes through this phase.

The only foreseeable competition can come from Amazon if govt allows FDI in multi brand retail.
 
Is this really true??? Because for the service side,this doesn't seems like that.

Ordered a LED monitor from letsbuy on 14th Feb, status - in process (since 14th
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Ordered a book from Flipkart today at 18:00Hrs, status - shipped at 23:00Hrs via bluedart.

Now have flipkart already bought letsbuy??
 
CA50 said:
Is this really true??? Because for the service side,this doesn't seems like that.

Ordered a LED monitor from letsbuy on 14th Feb, status - in process (since 14th
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)

Ordered a book from Flipkart today at 18:00Hrs, status - shipped at 23:00Hrs via bluedart.

Now have flipkart already bought letsbuy??
Click to expand...

not yet
 
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