The Indian drama that keeps on giving.
Snapdeal rejected an acquisition bid from rival Flipkart Online Services Pvt, saying it will compete alone in India’s e-commerce market.
Snapdeal, which said it will sell off some non-core assets, is set to post a gross profit this month, the startup said in an emailed statement Monday.
SoftBank Group Corp., which has almost a third of Snapdeal shares, and Tiger Global Management, which holds a substantial stake in Flipkart, had been pushing the two competitors to merge so they can create a stronger local company to fend off Amazon.com Inc. SoftBank abandoned the effort after trying to negotiate the deal, said people with knowledge of the matter, who asked not to be identified because the talks were private.
Maybe that is for the better for both companies or, at least, it will be better for Flipkart this way. Several analysts have been wondering how much Flipkart would gain from getting Snapdeal. (quite a few argued: very little.)
As Amazon and Alibaba, via Paytm, go head to head in India, it would be close to a miracle if Snapdeal manages to get sustainable marketshare against those giants and the larger Flipkart.
At least, Flipkart can now set its focus onto the real battle.
- Flipkart to Buy Snapdeal for $900 to $950 Million, Softbank Will Own 20% of Flipkart
- Fight for India Intensifies: Flipkart May Buy Snapdeal, and May Merge With eBay India
- Fight For India: Alibaba Goes Paytm, Snapdeal Cuts Costs, Flipkart Cuts Merchant Fees
- Snapdeal Shows What Walmart Should Have Done With ShippingPass
- eBay Was the First One in India and Still Missed the Boat