Flipkart and Amazon may be in talks for a deal

The latest media buzz from e-commerce world; Flipkart is supposed to be in discussion with Amazon, considering to sell itself. Although nobody from either Flipkart or Amazon confirmed this, people in the know are certain about the goings on. However, Binny Bansal, CEO, Flipkart has said talks of it being on sale were baseless and it would continue to be the market leader in India.

The potential of a sale of Flipkart raises some serious questions about the willingness and readiness of Indian start-ups to fight prolonged battle for dominating the market. Also, it changes the narrative of the Indian online retail industry. Also, these are interesting times in the Indian e-commerce industry with major big pocket investors jumping in. Japan’s SoftBank has invested in Snapdeal while China’s Alibaba is the biggest investor in Paytm.

In recent weeks, Flipkart had opened negotiations with Alibaba for a fresh round of funding. In fact, Flipkart has been in the market to raise USD1.4 billion. It is doing so as competition grows stiff and fundraising becoming tougher. Of late, big and small start-ups have been cutting costs as investors and founders turn their attention to the bottomline.

As per sources, Amazon made a preliminary offer of to acquire Flipkart. Last month, Morgan Stanley had slashed the vaule of Flipkart shares by 27 per cent. The talks between Flipkart and Amazon stopped after the offer was perceived to be too low but with Alibaba showing interest in Flipkart, situation may change. Sources point out that if Alibaba picks up stake in Flipkart and decides to merge Flipkart, Paytm and Snapdeal into one, then that may put Amazon in a spot.