Snapdeal is having a tough time keeping up with the ecommerce leaders in the country. The etailer has tried hard to make things work, but when compared to its competition it comes off short in multiple key areas. Trouble at Snapdeal is prominent. Its sellers have complained about withheld payments and obscure accounting. This makes most suspect that the etailer is in some kind of financial trouble.
To prevent the company from crashing completely and avoid losing its investments, Softbank, Snapdeal’s biggest backer is looking to consolidate the company with Flipkart, the top dog of Indian online retail. Flipkart is motivated to acquire its rival Snapdeal to increase its ecommerce strength in the country and keep Amazon from taking its place.
Amazon lost out to Softbank backed Alibaba in China and doesn’t want the same to reoccur with Flipkart in India. The foreign etailer has deep pockets and years of experience on its side. Merging forces with Snapdeal will give Flipkart more market share and popularity in the country. And, with Flipkart on its side, Snapdeal has one less competitor to deal with. Plus, it can gain assistance from Flipkart to grow and survive in the ecommerce industry.
If Flipkart and Snapdeal will work out so well together, why haven’t they merged yet? According to sources with knowledge of the merger stated that the acquisition is going to happen soon. All that’s required at this time is the support of investors, like –