The online mega store ‘Flipkart’ to take under its wing fashion retailer Myntra.
After significant speculation in the market about Indian e-commerce giants Flipkart and Myntra combining forces, it has been confirmed that Flipkart will be acquiring a majority stake in Myntra.
The Flipkart – Myntra merger will lead to Myntra being valued at $330 million and Flipkart at $2.5 billion.
However, certain facts concerning the independent functioning of Myntra post the merger still remain undecided. It cannot be affirmed whether Flipkart will be taking over Myntra entirely or just be in posession of the brand name.
The most important ramification of this merger is that, it will act as potent deterrent for the likes of Amazon and Walmart who are aggressively vying for a share in the Indian e-commerce business. U.S retail giant Walmart has been in a constant battle with the FDI regulations in India which forbid foreign direct investment in e-commerce.
Despite of such regulations, foreign entities like Ebay and Amazon have a significant market presence in India and are constantly breathing down the neck of local players. Thus, this merger comes at a crucial time.
In India, Flipkart is probably the closest competitor to Amazon.
Photo Credits: techinasia