Flipkart had raised around $ 8.1 billion in five deals during the period, including the $2.5 billion round led by SoftBank in August last year. It has also seen partial or full exit of some of the investors such as Tiger Global, GIC, Kalaari Capital, Accel India and Vulcan Capital from the company in August 2017 in a buyback deal of $718 million, and to the tune of $350 million deal in May this year, it said.
In 2017, e-commerce witnessed 24 deals and the aggregate disclosed value was $1.6 billion. Intense consolidation was witnessed in the online retail space as organisations acquired other strategically aligned players in an attempt to gain access to a larger customer base and distribution network. The year also marked the entry of another global e-commerce giant, Alibaba, in the Indian online retail space. An investor group comprising Alibaba and SAIF Partners acquired a 41 per cent stake in Paytm for $200 million. With the recent set of events, the Indian e-commerce sector, which is now dominated by three major players — Amazon, Flipkart and Alibaba (through Paytm), is likely to witness accelerated consolidation as these three attempt to capture additional market share.
On the other hand, some momentum was also visible with online players entering the offline space. Amazon’s investment arm has agreed to acquire a 5 per cent stake in Shoppers Stop, a Mumbai-based retail company, for $27.7 million.
The recent deals indicate that while individual formats (online or offline) will remain important in the near future, omni-channels will increasingly score on convenience and better shopping experience.
With rising discretionary spending, favourable demographics and growing internet penetration acting as triggers, the prospects for the M&A sector look promising, says experts.
As the economy transitions toward a less cash model, time is also ripe for players to acquire leading-edge technologies that support digital transactions. Within distribution channels, while online retail will continue to garner a lot of investor interest, the sector is likely to witness M&A activity in the offline space as large players further consolidate their resources.
“India is known as the best market to be in, currently in retail. The income levels are growing, GDP is one of the highest and there is a huge consumer base with disposable income to spend. Almost every company in the world is looking at India as the best market to be in,” said Kumar Rajagopalan, CEO, Retailers Association of India.