Online retailing major Flipkart is believed to have sent a revised offer of $900-950 million to buy the smaller rival, Snapdeal according to the sources.
This Bengaluru based firm has offered to pay the said amount for buying Snapdeal’s online marketplace and Unicommerce. Earlier the Snapdeal’s board has already rejected a takeover offer of $800-850 million which was around Rs 8,500 crore from Flipkart. The term sheet signed over the weekend nominally values the Gurgaon-based Snapdeal at about $1 billion.
Flipkart’s revised offer was made for Snapdeal’s marketplace and its e-commerce solutions provider Unicommerce but does not include its logistics arm Vulcan Express and digital payments unit FreeCharge, which may be sold separately, according to the sources.
Infibeam, a listed e-commerce player has also made an offer for Snapdeal, as per the sources. The Snapdeal board is likely to consider this proposal. However, Snapdeal’s founders would also like the Infibeam proposal to be evaluated before any final decision. Snapdeal is expected to make a decision on the two offers in a week or 10 days according to the sources. The board of Snapdeal will soon conduct a meeting to consider the offer.
This merger will, however, help Flipkart, which is already backed by Microsoft Corp, China’s Tencent and online auction site eBay, bulk up and stay ahead of Amazon, which is expanding rapidly in the world’s fastest growing internet service market.
Indeed, more people are downloading the Amazon app rather than the Snapdeal app. Amazon India even surpassed Flipkart as the most downloaded app in the first quarter of 2016, according to app data tracker AppAnnie.
Today e-commerce space is becoming increasingly restricted in the minds of the buyer. Amazon built trust, easy returns while Flipkart never let go of its first mover advantage. Unfortunately for Snapdeal, it chose to follow the herd.
