Predict future mergers and acquisitions in Indian E-commerce?

Ganesh

[ Edit : Reopened. This does warrant a separate thread! ]

Consolidation in India E-commerce market may just be starting,

Would be interesting to predict the M&A's in near future!

Sameer

I don't know if they will, but someone like the Future Group might try a leapfrog with a buyout. Of course, if all the decent ones are bought by then, toughie.

Question: which might the decent buyout targets be at this stage? Across both the generic/niche plays?

sinha

Next is Exclusively.in?

Sameer

@sinha - coming from you, one wonders if thats a rumour/leak or a guess :)

Update : so i guessed it right : http://www.pluggd.in/after-letsbuy-exclusively.in-up-for-sale-297

sinha

There are atleast two more in the queue (raised in the range of ~10mn+). The reason for this bloobath is the Series A investor who jacked up the valuation (and the startup felt good), but is unable to justify those valuations.

Not sure why MBA degrees/excel sheet calculations weren't used diligently, but that's how it is.

Reminds me of the song: Welcome to the Jungle(e)!

Sagar

ThisMoment has acquired Position2 http://techcrunch.com/2012/02/08/thismoment-acquires-position2-becomes-full-service-promotion-engine/

Quoting: "We can scoff all we want about ham-handed attempts at social media interaction, but Thismoment works with over a hundred Fortune 500 companies and those guys, as they say, aren’t fooling around."

william

From a Business point of view:-

Flipkart maybe doing Amazon a favour. Wallop all the smaller e-commerce players and then set itself up for a wallop by Amazon itself. :D

From a Consumer point of view:-

Not good at all. Before buying a gadget, i would definitely compare prices on letsbuy and flipkart. But now i am sure that even if both will be selling the same gadget there wont be differential competitive pricing. Its a known fact, repeated several times, in India, people (mass consumers not niche) will buy online only if its cheaper. Why would i want to buy a television costing 40K, for 1K less if I can't see the product before hand. I would prefer paying the entire amount and picking up the piece myself.

Nitin2020

i think consolidation will happen segment wise first and then consolidation across segments. At the end i think we will have 3-4 huge online superstores where you will find everything.

A lot of firework is gonna happen in next few months. between Flipkart and amazon we are forgetting indiatimes, which has good online business and deep pockets

1. in general gadget (everything) segment i think there are few big startups - Flipkart, snapdeal, and infibeam. I think indiatimes should pickup infibeam or Snapdeal - i think snapdeal is better/known brand. Flipkart is only eyeing Amazon from the beginning that's why whatever they do has a footprint of Amazon.

then they are smaller ones indiaplaza, homeshop18, tradus.in - most of those are going to die quickly in 2012 itself.

2. Baby product websites too many of those without any sustainable model - firstcry, babyoye, hushbabies, hoopos. Even if they merge within their segment i don't see any light at end of the tunnel. Have you seen any other product than diapers which is advertised by these baby product websites ?

May be indiatimes should also acquire one of these. Flipkart can strategically enter this segment by acquiring may be firstcry or hoopos.

3. General health and care websites - healthkart, medbeautyplus, goodlife(firstcry). i think they were started with a crowd mentality no business at all. Nobody will pick them

4. Apparel websites - myntra, fashionandyou etc. Again indiatimes should pickup one of these.

5. Online groceries and vegetables - many sites - i don't think they will gain mass market. they will either die slow death or end up region bound only with few crore business in a year for 2-3 partners to keep them out of jobs.

6. Daily deal sites - i think most of these sites will die down sooner than any other online site. If Indiatimes picks up Snapdeal then i think deal business for other websites is over.

Dhruv

Almamaterstore or Inkfruit

rohangogoi

The market is really big and three or four top players may emerge. However there is nothing called loyalty among Indian customers and that may turn out to be the bane of flipkart. These are my bets

1.Flipkart - Already captured the mindshare of indian customers and may suck in Myntra, babyoye and other players in Tiger Global Portfolio in future. But they will bleed for a long time to come and very less chance of making money in future before 2 or 3.

2.Amazon - Everyone is assuming that Amazon will come in and in no time will become the market leader and will beat flipkart and other players. If it was so easy amazon would have done the same in China. They acquired Joyo.com which was the Chinese E-com leader and tried to "Americanise" it as a result of which they burned their hand and now joyo.com is the #3 largest player in India.

3.HomeShop18 - I know most people reading this would have never ordered from them but to me this is the most interesting play in Indian E-Commerce simply because they are actually making money (profitable) through their TV business. Their online traffic is just 10% less than flipkart (with zero ads on TV) and they are burning least in Indian E-Com. They have been quietly building their ecommerce team and back end infra and I wont be surprised if they emerge as the leading E Com play . Some of the companies in SAIF Partners portfolio - read firstcry.com , zovi.com etc may fold into them

4.Niche Sites - Websites like babyoye.com, zanzaar.com , inkfruit.com and many more will survive in this mad jungle and the first 3 will keep on acquiring from this segment.

5. Ebay - They will survive, whatever happens with a flat growth and will be among one of the top players

6.Oldies - Rediff, Indiatimes, Indiaplaza etc will just chug along and some of them may shut down in next 2-3 years

PS: My opinions are solely based on my experiences as a mobile phone vendor to most of these sites

Ganesh

Sounds interesting @rohangogoi.

Also I believe one of the mid level logistics company and one of the top 3-4 players will be acquired within the first half of the year by amazon.

Infibeam is one more player who will compete in the 3-4 player category alongwith Flipkart, Indiatimes, Indiaplaza.

Also deals sites like, snapdeal, crazeal will grow as they venture more into tier 2 cities. And they also will consolidate by acquiring smaller players.

rohangogoi

@ganesh - Not sure about these acquisitions you are mentioning. These are pure guesses. AFAIK Amazon has got a license to set up a courier company. If you look at Amazons past acquisitions they always acquire to gain market share , increase product selections or if there are some complimentary skills.

I am not sure about infibeam. If you check comscore, they are the only player who are growing downwards when everyone else and market is growing upwards . The only thing that is promising from their side is the "Build a Bazaar" platform

Personally , I dont like the daily deals business as it focuses only on discounts to attract customers and merchants cannot offer disocunts for too long.t I dont think they will ever make money.The sites you mentioned are completely different from pure E-Commerce sites

Ganesh

@rohangogoi: waiting for time to tell!

My opinions(guesses) are based on basic understanding of business,

About Amazon, inspite of Amazon getting FDI approval to set up logistics in India, they can't start from scratch as they would not want to give time for the competition to grow.

About infibeam: Buildabazaar is just another line of service for them and my own venture was started on it, since they also cater to same segments as flipkart, I mentioned them as competitors.

About daily deal sites, Same merchant can not offer discounts for too long but there are so many merchants available, so as they grow they will reach out to more and more merchants and customers!! Also these deal sites are getting into what you may call as pure e-commerce by selling products.
(eg-Snapdeal, Koovs)

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