MACR PPT

1. COMPANY PROFILE
FLIPKART
Founded in October 2007, Flipkart is one of India’s leading e-commerce
marketplaces, with headquarters in Bengaluru. Flipkart was founded by
Sachin Bansal and Binny Bansal and the company initially started as an
online book store. Later, as the company’s popularity grew, it also started
selling other items such as music, movies and mobile phones. As the e-
commerce revolution gained momentum in India, Flipkart grew at an
accelerated pace and added several new product ranges in its portfolio. As
of now, the company offers more than 80 million products spread across
more than 80 categories such as mobile phones & accessories, computers
and accessories, laptops, books and e-books, home appliances, electronic
goods, clothes and accessories, sports and fitness, baby care, games and
toys, jewelry, footwear, etc.

MYNTRA
Myntra is an Indian e-commerce platform for buying branded footwear, apparel and
accessories for men and women. The Company has tied up with leading fashion and
lifestyle brands in the country such as Nike, Adidas, Puma, Lee, Levis, Wrangler,
Arrow, Jealous 21, Biba, Fabindia, US Polo and the likes to offer a wide range in
latest branded fashion and lifestyle wear. The Company's value proposition revolves
around giving consumers the power and ease of purchasing fashion and lifestyle
products online. The Company's offerings include the largest in-season product
catalog, authentic products, cash on delivery and 30-day return policy.

2. INDUSTRY PROFILE
FLIPKART
Flipkart started as an online bookstore in October 2007. The founders Sachin Bansal and
Binny Bansal left their jobs at Amazon.com to launch their own company. It was a risky move,
since the e-commerce sector in India was mostly non-existent at that time and there was no
certainty about its future. However, the founders took the risk and now it has turned out to be
a huge success. One of the major problems that Flipkart tackled during its initial years was
online payments. At that time, people in India were averse to make online payments to a
virtual store. Flipkart solved the problem by launching its ‘Cash on Delivery’ service, which
helped build confidence among online buyers. Flipkart also made significant efforts to improve
the supply chain system, which helped the company to ensure timely delivery to customers. In
2013, the company created a record by selling one lakh books on a single day. In 2016,
Flipkart had crossed the 100 million mark in registered customers.
 MYNTRA
Established by Mukesh Bansal along with Ashutosh Lawania and Vineet Saxena, Myntra sold
on-demand personalized gift items. It mainly operated on the B2B (business-to-business) model
during its initial years. Between 2007 and 2010, the site allowed customers to personalize
products such as T-shirts, mugs, mouse pads, and others.[10]
In 2011, Myntra began selling fashion and lifestyle products and moved away from
personalisation. By 2012 Myntra offered products from 350 Indian and International brands. The
website launched the brands Fastrack Watches and Being Human.[11]
In 2014 Myntra merged with Indian e-commerce company Flipkart.com in an estimated deal
of ₹2,000 crore (US$310 million). The merger was influenced by two large common
shareholders, Tiger Global and Accel Partners.[9] Myntra functions and operates
independently.[12] In 2014, Myntra's portfolio included about 1,50,000 products of over 1000
brands, with a distribution area of around 9000 pincodes in India.[13]
In May 2015, Myntra moved on to app-only business model wherein customers can only make
purchases on the site through smartphones. The move came after the site claimed that 95
percent of Internet traffic on their site came mobile and 70 percent sales were generated through
smartphones. The move to app-only generated mixed reviews and saw 10% dip in sales
initially.[14][15] Also in 2015, Ananth Narayanan became the Chief Executive Officer of Myntra.[16]
Iin February 2016, the company retracted its app-only model in an attempt to win back lost
customers. The company said that the app-only strategy had backfired and Myntra would
relaunch its website.[17]
In September 2017, Myntra negotiated the rights to manage Esprit Holdings's 15 offline stores in
India.

3. NO OF EMPLOYEES

kart Pvt. Ltd.

Type of Private
business

Founded 2007; 11 years ago

Headquarters Bengaluru, India

However some parts are registered

in Singapore, Taiwan, Sri Lanka

Area served India

 Founder(s) Sachin Bansal

Binny Bansal

Key people Sachin Bansal (Chairman)[1]

Kalyan Krishnamurthy (CEO)

Services Online shopping

Revenue ₹19,854 crore(US$3.0 billion) (2017)[2]

Employees 30,000 (2016)[3]

Subsidiaries Myntra, Jabong.com, PhonePe, eBay.in (India), Ekart,

Jeeves.co.in

Website www.flipkart.com

Alexa rank 160(Global, (February 2018)[4]

9 (India, February 2018)[4]

Commercial Yes

Registration Required

Current status Online

MYNTRA

Private

Type of site E-commerce

(Online shopping)

Available in English

Area served India

Founder(s) Mukesh Bansal

 Vineet Saxena

Ashutosh Lawania

CEO Ananth Narayanan

Parent Flipkart

Subsidiaries Jabong.com, Fitiquette

Alexa rank 969 (March 2018)[1]

Commercial Yes

Registration Required

Launched 2007

Current status Online

4. TYPE, YEAR OF MERGER

Myntra and Flipkart are two most common names of Indian e-commerce. Both started
their journey in 2007, grew exponentially in terms of products, business verticals,
fund, consumers, market share by changing their model continuously as per market
demand and finally both merged together in 2014. The market exit of Myntra in 2014
is one of the successful and remarkable exits in Indian startup eco system.
Why the online fashion industry has gained so much weight? Flow of money and
rising per capita income (middle class) has fueled Improving standard of living. Easy
access to internet and explosive progression in the number of smart phones users,
availability of much wider range of product – domestic and imports, competitive
prices, development of million dollar startups have increased the acceptance of e-
commerce in India since last decade. Myntra, Jabong, Snapdeal, Flipkart, Paytm etc
are shining due to acceptance for solving the cost, time, quality and delivery concerns
of people.

5. IMPACT OF MERGER
The much awaited Flipkart-Myntra deal marks a historic event for the Indian
ecommerce industry," said Sachin Bansal, CEO of Flipkart, in a press conference on
Thursday. He added: "Myntra is well-funded and did not need this, but we did need
this merger to create a very powerful and deep fashion business."
Flipkart is a leader in selling multiple product categories online and Myntra is India's
leading fashion retailer with strong brand recall.
The deal is the only one of its kind.
Rahul Chowdhry, Director at venture firm Helion, likes to compare it with Amazon's
acquisition of fashion portal Zappos in 2009 for around $1.2 billion. Amazon could
have built its own fashion capabilities, but acquiring Zappos worked out better, as the
latter had built up a big presence and had revenues of about $1 billion in 2008.
"Previous deals have been quite depressing," said Bansal in response to a reporter's
question. Flipkart's earlier acquisition of electronics retailer Letsbuy has been widely
seen as a forced exit by investors.
The current deal appears to be win-win for both companies, and could be the making
of a giant company, better positioned to address India's growing demand for online
retail - one that could put up strong competition against rivals.
For Flipkart, the biggest selling category has been electronics, but with this deal, the
company hopes fashion will be the biggest within a few months.
Flipkart has announced it will invest $100 million in Myntra over the next 12 to 18
months, and said it hopes to become the country's largest fashion entity. That is a big
advantage for Myntra, which has raised $125 million so far, and will not have to
worry about raising funds for further growth.

If both companies continue to work independently, what is the bigger strategic benefit
of the merger? "It seems like the game plan is to quickly reach out to a wider network
customers, while allowing them much wider options," says Sandeep Ladda, India
Technology Leader PwC. "However, company leaders occupying a board seat usually
means taking decisions on integrating systems and processes."