Study of ‘Mergers & Acquisitions’ Growth strategy in E-Tailing Industry (A case Study of Flipkart-Myntra: The Online Giants)

In a fiercely competitive e-commerce market, biggies are sounding a death knell for the small and mid-sized players threatening to eventually wipe them out of India's burgeoning e-tailing landscape. The domestic digital commerce market is expected to clock a higher growth in 2014-15 due to better internet penetration, increase in trust level and pricing advantage. Growing number of internet users, a more secure and convenient transaction system, coupled with lucrative offers and a 24x7 delivery system are the common drivers of growth. With Flipkart raising $1 billion in fresh funds and Amazon pouring $2 billion into the India market, many existing players could fall off the investors' radar paving the way for a two or three-way race between Amazon, Flipkart and Snapdeal in India. Investor’s appetite to pour money into smaller horizontal players like Tradus, Infibeam and ShopClues would come down substantially forcing some of them to hit the exit button. But the specialized online retailers such as Urban Ladder and HealthKart may hold on to their turfs despite the onslaught from the big e-commerce players. So far, Flipkart has risen close to about $1.7 billion from a clutch of investors as it fights out Amazon and domestic rival Snapdeal in a fast-growing e-commerce market, projected to touch $8 billion by 2016. India has 243 million internet users, and this number continues to grow rapidly due to increased smartphone penetration. Merger and Acquisitions are the most common approach used by these major players to grow in size and fight the competition across the world. This paper is an effort to study the M&A of Flipkart and Myntra and its impact on the e-tailing industry of India.