Mukherjee, Business Today
Delhi , 19 December 2014
a bid to strengthen their presence in the e-commerce sector, large
players such as Amazon, Snapdeal and Flipkart are likely to look
at acquiring companies with niche, differential capabilities,
say industry analysts.
With the recent acquisition of gifting technology platform Wishpicker
by Snapdeal and reports about its acquisition of online order
management platform Unicommerce, experts feel e-commerce players
are looking to benefit from the vertical capabilities that such
companies have on offer.
"Snapdeal will be able to leverage Unicommerce's platforms
to achieve in-depth visibility into its vendor profiles in terms
of both inventory and accounts as well as improve its customer
services," says Sanchit Vir Gogia, Chief Analyst and CEO,
Snapdeal is flush with cash after recently receiving $627 million
in funding from Softbank. The online retailer earlier this year
also acquired social product discovery technology platform Doozton.com.
With Flipkart acquiring Myntra this year, and several other
acquisitions that have been taking place over the past couple
of years, this seems to be one of the trends emerging in the industry,
says Devangshu Dutta, CEO of consulting firm Third Eyesight. "The
key word is differential, because the generic ones have already
happened to a certain extent," says Dutta.
Arvind Singhal, Chairman of Technopak Advisors, says that as
investment dries up for the several niche smaller players who
have been unable to show growth, these are likely to be snapped
up by the bigger players. "We will see that happen more in
the next few months," says Singhal. "Amazon, Flipkart,
Snapdeal will start looking for specialty players, or very niche
specialty players, either for the market, or for technology."
Analysts also note that while this kind of consolidation helps
establish one or a few clear winners, it is not good for the industry
as a whole.
According to Harminder Sahni, Managing Director of consultancy
Wazir Advisors, for any industry to strive there needs to be a
lot of players, creativity and lots of new ideas. And, primarily
driven by investor interest, with these kinds of acquisitions,
the industry is likely to go the modern retail way where there
are only a few players such as Shoppers Stop and Future Group.
"(Investors) are not interested in building a large ecosystem
where a lot of players strive. They want to have a winner and
they all want to be a part of that winner," says Sahni.
(Published in Business