Two of India’s largest web-only retailers have gotten together. Flipkart, No. 122 in the 2013 Asia 500, has bought Myntra, No. 217, the e-retailers jointly announced last week. Flipkart and Myntra did not reveal the terms of the all-stock deal, but said Myntra will continue to operate under current leadership.
Flipkart, which launched in 2007, sells across multiple product categories, including movies, music, games, consumer electronics, home appliances and toys. Myntra, which also launched in 2007, sells primarily apparel and accessories. Looking only at India-based e-retailers in the Asia 500, Flipkart is the second-largest e-retailer in India and Myntra is third. The Asia 500 rankings are based on 2012 web sales. IndiaTimes Shopping is the largest.
Myntra co-founder and CEO Mukesh Bansal said in a televised press conference that Myntra will be able to leverage Flipkart’s operational assets, such as its supply chain and technology, while maintaining its own brand long-term.
“Flipkart and Myntra are getting together to create one of the largest e-commerce stories in the country,” said Sachin Bansal, Flipkart co-founder. “Myntra is the leader in fashion today, and we would love to work with and learn from Mukesh and Myntra.” Bansal said he expects fashion to be the largest selling category for the company in the next few years.
Flipkart and Myntra have both attracted venture capital. Flipkart has raised a total of $750 million, including a new round of $210 million it announced yesterday. Myntra had raised $158.8 million before its acquisition. Investment firms Tiger Global Management and Accel Partners have invested in both companies.
Flipkart’s acquisition of Myntra comes as foreign e-retailers make investments in Indian e-commerce, which is growing quickly. Forrester Research Inc. says online sales in India will grow from $2 billion in 2013 to $16 billion in 2018, increasing more than 50.0% a year.
Amazon.com Inc.’s Indian web site, Amazon.in, launched last year, with all physical goods sold by third-party merchants at this time. (Indian law puts restrictions on investments by foreign retailers. India requires that retailers based outside the country source 30% of their products and services locally.) Amazon is the seller of record only for digital products, such as e-books and apps. Amazon told Internet Retailer in April that it operates one distribution center in India to provide fulfillment services for merchants selling through Amazon.in. It began offering next-day delivery to consumers in some of India’s largest cities—including Bangalore, Mumbai, New Delhi and Hyderabad—in December. Amazon is No. 1 in Internet Retailer’s Top 500 and newly released Europe 500 rankings.
EBay Inc., which already operates eBay.in, increased its investment in Indian e-commerce earlier this year by investing in Indian online marketplace Snapdeal. It led a funding round that raised $133.8 million. EBay had previously invested $50 million in Snapdeal.
Wal-Mart Stores Inc. last month announced it will open 50 cash-and-carry wholesale stores in India through a subsidiary within the next five years, and that it will enable wholesale store members there to make purchases on the B2B-focused web site. Walmart.com is No. 4 in the Top 500 Guide.