E-retailer Flipkart has acquired smaller rival Letsbuy, signalling the first wave of consolidation in the e-ecommerce space in the country. Though the companies did not disclose the amount for the deal, indications are that it could be anywhere Rs 125 crore.

“This acquisition fits into our strategy of building dominant shares in all categories we operate in. We are already leaders in the books and media verticals. Given that we managed to build a leadership position in consumer electronics as well since our launch in early 2011, it made sense for us to consolidate when we saw this opportunity,” Flipkart’s co-founder and chief executive officer, Sachin Bansal, said in a statement.

According to Flipkart, the 350 staff team of Letsbuy will function independently and will leverage Flipkart’s technology platform and supply chain capabilities.

The acquisition comes after the world’s biggest e-retailer Amazon announced its India foray with Junglee.com earlier this month. “Letsbuy has experienced a phenomenal growth in the past one year and holds a dominant position in the e-commerce industry in India. We believe that our expertise in computers, communication and consumer electronics category matched with Flipkart’s superior technology and supply chain could be a winning combination. The company had a choice to raise a large round of funding. But aligning our business with the largest player in the market made sense, as the resultant synergies will guarantee our customers the best possible service, price and selection,” said Hitesh Dhingra, founder and chief executive officer, Letsbuy.com.

According to Flipkart, the finer details on mutual synergies were being worked out by both the teams.

“This acquisition opportunity came at a very attractive price for us and the timing has also been ideal. The synergies will now allow us to accelerate faster and get to a share similar to what we enjoy in the online books category,” said Bansal.

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@mydigitalfc.com