Sunday 24 January 2021
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Flipkart looking to ‘Chinese’ model of e-commerce growth via acquisitions

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Politics India Flipkart looking to 'Chinese' model of e-commerce growth via acquisitions

Bengaluru: India’s largest home-grown internet company Flipkart is looking at acquiring stakes or buying out smaller peers to grow its own top line, a model perfected by Chinese counterparts Alibaba, Tencent and Baidu.

Flipkart is said to be in talks with multiple firms like online food-ordering and delivery service Swiggy, home services firm Urban Clap, online furniture retailer Urban Ladder, ticket-booking platform BookMyShow and even some financial technology firms, according to report.

These deals seem to be at an exploratory stage, but Flipkart’s intent is increasingly becoming clearer. While investments in some of these firms might have obvious benefits – for example, Urban Ladder could list its furniture exclusively on Flipkart, or Swiggy’s delivery fleet could help fulfil grocery orders – what other investments will do for the company remains to be seen.

 Armed with a war chest of $4 billion to combat global rival Amazon’s growth in India, Flipkart is looking outwards for innovations and growth into newer categories. The company already has several large acquisitions under its belt, such as Myntra, Jabong and phonePe. And, that makes Flipkart stand out among peers in the number of acquisitions and investments made so far.

 Myntra and Jabong, in addition to the apparel that Flipkart sells on its own platform, currently make it the market leader in the segment. While Amazon counters this view, independent analysts agree that Flipkart sells more fashion than rivals. The number for market share, however, varies on the basis of who you ask. Similarly, while it still has a long way to go before catching up with market leader Paytm,PhonePe has already become the largest UPI payments app in the country.

 Flipkart is looking at more meaningful deals such as these going forward, rather than acting like a venture capital firm as in the past. It has invested in firms such as Logistics, Tinystep and NestAway, largely looking at gaining returns rather than for utilising their services to grow its own business.

 With backers like SoftBank, Tencent and Microsoft, the company also has access to minds that have great experience in making strategic investments. Also, these investors don’t just want to rule India’s online shopping space, but have ambitions to win across the country’s internet sector. So, they could look to Flipkart to power some of this.

 

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