Flipkart set to buy rival LetsBuy: reports

Flipkart, India’s premiere online shopping site, has recently started expanding more aggressively in the consumer market. Dedicated users of the online shopping site have probably received several emails in the last two months from the site highlighting new products now available such as computer ram, motherboards, etc. Flipkart is no longer just about books. It’s in expansion mode and this became clear today when Medianama broke the news of the site having acquired, rival online retail website, LetsBuy.com

So what does LetsBuy distribute? The website is not very old, having only been launched in July 2009, and is focused on retailing consumer electronics, communications and computer goods, though it’s expanded product list now includes toys, sports, healthcare, watches, etc. It is most likely that LetsBuy’s consumer electronics business will have played a big part in making Flipkart buy the company.

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[caption id=“attachment_208398” align=“alignleft” width=“380” caption=“Screengrab of Flipkart”]  [/caption]

Accordingto the Medianama report which quoted one of the early investors of Letsbuy,

“The terms of the deal are not known, and at the time of filing this report, we’re awaiting a confirmation from Flipkart co-founder Binny Bansal.The deal is expected to be announced over the next couple of days.

Manish Vij, the co-founder of the Vun Network, and one of the early investors in Letsbuy declined to confirm or deny the development to Medianama, saying that “LetsBuy is the second largest player in the country, and is the strongest competitior to Flipkart. From a comscore standpoint, it has 2 million unique and over 5 million visitors every month, and is among the top 4 commerce sites in the country.”

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With American giant Amazon making an entry into the India market with Junglee.com and offering deals on a lot of products that are unavailable in the country, Flipkart is not entirely unaware of the competition. This move is likely to expand services and production and could help Flipkart stand strong against Amazon when it makes a complete entry into the e-commerce market in India.

Flipkart, founded by former Amazon employees, Sachin and Binny Bansal, is currently shipping nearly30,000 items per day across27 cities via its own delivery system. When compared to bigger players like Amazon, this seems like peanuts but that fact is that for a lot of India consumers, Flipkart has won brand loyalty with timely shipments, and excellent customer service. Flipkart’s expansion story has largely been possible because of the customer support it has received.

TheNextWeb, commented on the deal stating that

Suddenly, over the course of a week, India’s e-commerce markets appears to have moved from a local dominated market towards an industry that could pit Flipkart against Amazon.

The Indian e-commerce market is one that is yet to reach its full potential. India currently has only around 100 million Internet users, and the number of users who are accessing online shopping sites is growing at a significant rate. According to comScore survey, nearly 60% of Indian internet users have visited online shopping websites.

_ TheNextWeb_story also mentions that

Amazon had also attemtped to buy Flipkart last year. Since then Flipkart has grown considerably having recently predicted a ten fold increase in sales as the country’s online retail space grew significantly last year.

As far as Indian netizens are concerned the growth of the online retail industry means good news because it translates into far more choices and deals/offers on products. That the e-commerce market in India is going to get much more exciting in the next couple of years is now less of bubble-talk and more about money.