How Snapdeal Flipkart Merger Will Impact Amazon’s Business?

With the arrival of Amazon.com, the story of e-commerce market in India started to change. The online players like Snapdeal, Flipkart, Shopclues started fighting war chest against Amazon. Though it was not an easy drive, but the cut-throat competition prevailed. And now the latest scoop says that Snapdeal is going to be acquired by its rival Flipkart. So, is this a strategy to give a close shave to its rivals and what effect it will have on consumers?

The merger of Snapdeal and Flipkart

India’s largest e-commerce marketplace Flipkart has announced to take over Snapdeal at a revised offer of up to $950 million, providing a dog eat dog competition to Seattle based company Amazon Inc.

Will this merger deal be able to keep the competition at bay?

The experts are of opinion that this merger deal will arm Flipkart with additional supply chain infrastructure and access to more funds (as SoftBank Group is the largest shareholder of Snapdeal) to take on its rival Amazon. Theoretically, they will be able to destroy Amazon skyrocketing popularity.

What effect it will have on the consumers?

It totally depends upon the final contours of the deal. By that we mean whether Flipkart will help Snapdeal to retain its original status like it did with Jabong or Myntra or will it kill the Snapdeal brand. The experts are hopeful that as Snapdeal brand has a lot of acceptance in North India with respect to offers, products galore, etc. So, Flipkart won’t kill it.

Will this merger have any effect on Amazon’s business?

Well, people are of opinion that the recent consolidation of Flipkart with Snapdeal, Myntra and Jabong is going to give a tough competition to Amazon. Even the Paytm tie up with Alibaba hints the same.  But, we believe Amazon is a strong, organized player and the e-commerce companies can’t sway this rival easily.

What led to the failure of Snapdeal?

The company failed to stand out in the market even after experimenting with a new logo and partnering with ClearTrip, redBus, Zomato, Urbanclap. The reason behind its failure was unable to cope up with the changing times. Strategic mismanagement was the main reason behind its failure.

The results of this merger are yet to be seen. Let’s wait and watch.