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Home > In Other News > E-commerce sees consolidation growing in phases
In Other News
E-commerce sees consolidation growing in phases
Sangeetha G.
By  
  , Published : Jun 5, 2017, 11:50 am IST | Updated : Jun 5, 2017, 11:50 am IST

Consolidation and growth has been going hand in hand in the Indian e-commerce space. The consolidation initially saw the bigger players buying out smaller ones, vertical players or start-ups that provide support services. However, in recent times we have seen sizeable players conceding to the competitive pressure in the industry.
“Consolidation is imminent in the e-commerce space. Unlike other sectors where we can have even 30 -40 players competing with each other, in e-commerce there can be only one or two horizontal players. There can be some niche players providing specialized services and products. But even the verticals will get acquired by the larger players. That is how e-commerce industry has evolved in other markets,” said Harish H V, Partner – India leadership team, Grant Thornton India.
In the Indian market, we first started seeing consolidation happening when the horizontal players started adding new categories by acquiring the existing players. As early as 2010, Flipkart acquired weRead- - a social network based book recommendation and review portal. It bought out Letsbuy in 2012 when it added electronics on the platform.
Another kind of consolidation that was happening simultaneously was e-commerce portals acquiring support services.
Snapdeal acquired FreeCharge, a mobile transactions platform for around $400 million. Some of the smaller acquisitions the company made to strengthen support services included LetsgomoLabs and MartMobi.
In the vertical space too consolidation was happening. Online food-ordering platform Foodpanda bought Just EatIndia, three months after acquiring TastyKhana. Zomato acquired UrbanSpoon, FirstCry bought BabyOye and Ola acquired Taxifor Sure.
Then came the next phase of consolidation where we saw large vertical players being acquired by horizontal players. Flipkart bought out Myntra in May 2014 and later Jabong in 2016, which helped the company consolidate its position in the fashion space. “Acquisition of Myntra and later Jabong was a great strategy to consolidate their position in the apparel and accessory space. If Jabong would have been acquired by a competitor, it would have made things difficult for Flipkart,” said Pragya Singh, associate vice president, retail, Technopak Advisors.

Of late, we are seeing larger acquisitions and mergers happening in the space. eBay, the earliest marketplace in the e-commerce space merged with Flipkart and now Snapdeal too merged with Flipkart.
“There are a few vertical players that are still doing well in some categories like furniture and jewellery. Once the larger players expand themselves into these categories, we may also see them getting acquired. This can leave the e-commerce space with one or two large players,” added Harish.
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