Flipkart’s ‘Billion’ brand ready; millions for Snapdeal buyout to stay put?

Editor | Sep 15, 2020

In June 2017 IOS reported how Flipkart is developing its private brand ‘Billion’ to capture buyers’ attention. The Indian ecommerce leader has launched its brand, which would include items across home appliances and fashion category. Few products such as backpacks, irons, mixer grinders, and cookware have already been launched. A brainchild of co-founder Sachin Bansal, Billion came into existence to fulfil the need of unsatisfied customers.

While explaining the brand’s positioning strategy, Bansal said,

“The brand is positioned as made-in-India and made-for-India both. The made-for-India positioning is that these products are made for Indians’ needs only, not just high-income or low-income Indians, but for all. The made-in-India positioning and constraint is also a conscious choice. We believe that Indian engineering and manufacturing is becoming very efficient and reaching a point where high-quality products can be produced in India.”

Flipkart has partnered with (and plans to keep partnering) with Indian manufacturers to co-create products as they have a better understanding of the market.

AI and Data helped Flipkart to launch Billion

In the past, etailers have collaborated with established brands to launch online-only exclusive products or a range of products meant for a particular online platform. Flipkart’s Billion is a one-of-a-kind initiative launched by any Indian ecommerce player but not the only one if we consider global players. American ecommerce giant Amazon’s label Amazon Basics has expanded into a range of product categories.

But Bansal believes that no one has done it on a large scale like Flipkart. The home-grown etailer’s Artificial Intelligence (AI) wing helped them to develop and launch the ambitious Billion brand.

The executive chairman and co-founder Bansal asserted,

“(Such an initiative) has not been tried at this scale. There are brands that are master brands and which span across many categories. But nobody has tried it at such a breadth in the past. We believe there are two things that are different. One, people haven’t used data at the scale that we’re starting to use. Because in the absence of data, you’re basically limited by human intelligence. What we are experts at is our ability to use data and make sense of it from a customer’s point of view and co-create products with our manufacturing partners for India. That’s the expertise we’re building, which can be applied in multiple areas. One of the reasons why such a brand has not come up is because it’s really hard to do that manually.”

Billion is launched but what about the millions reserved for Snapdeal buyout?

Mystery shrouds the Flipkart-Snapdeal merger deal as conflicting developments emerge on a daily basis.

A few days back there were reports that Snapdeal has accepted Flipkart’s $950 million buyout offer. The only thing pending was minority shareholders’ opinion on the merger term-sheet. All the shareholders were going to vote on Flipkart’s offer in a week’s time.

But as per latest news reports, the merger deal might be called off!

Snapdeal’s spokesperson stated, “No formal communication has been shared with shareholders and no board vote has happened on a proposed deal.”

Company insiders have revealed that Snapdeal’s founders and shareholders were unable to reach consensus and hence Flipkart’s buyout offer might get rejected. A meeting of legal and investment banking team stands cancelled. Besides the difference over payout to major shareholders, Flipkart’s liability clause is the main issue of disagreement.

“The deal is unlikely to happen as there are a lot of differences among shareholders. Flipkart’s condition on getting each shareholder’s approval is next to impossible. Also, Snapdeal founders are not really keen on merging with Flipkart and they want to run Snapdeal as an independent entity,” disclosed a person aware of this development.


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