Consolidation gains momentum in e-commerce
Stage set for deals this yr with big buys in Feb, 15 deals in 2012
The news of Zovi.com acquiring Inkfruit.com has again spurred consolidation in the e-commerce space in India, with experts saying the trend of consolidation, which started last year, is only set to gain momentum in 2013.
“Consolidation in the e-commerce space is definitely on the cards. And if both the firms have the same investor, the process becomes smoother,” says Manmohan Agarwal, CEO at e-tailer firm Yebhi.com. PE firm SAIF Partners was the common investor for both Zovi and Inkfruit.
There were at least 15 merger and acquisition (M&A) deals in 2012 in the e-commerce space — much higher than 2011 as per M&A deal tracking firm Venture Intelligence.
Online retailer Flipkart acquired electronics retail firm Letsbuy.com for $25 million last year. PE firms Tiger Global and Accel Partners are investors in both the firms. Also, lifestyle retailer Fashionandyou.com acquired cosmetics retailer Urban Touch. E-commerce portal Yebhi.com bought Gurgaon-based lifestyle and fashion retailer Stylishyou.in, and Myntra acquired online fashion brand SherSingh.
“Normally e-commerce consolidation deals are PE-facilitated because investors are common and help make a connection. Many e-commerce firms opt for consolidation because even though there is value in the company, it lacks the strength and drive to raise capital. I see many more firms opting for consolidation this year. A few that are able to raise funds will get past and the rest will look at mergers,” says Alok Mittal, managing director at Canaan Partners. The firm has
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