Flipkart and Myntra merge, but work as separate entities

It’s official now. The much talked about Flipkart and Myntra merger has

now been announced. The association will see both the companies working jointly but as separate entities. Along with being the CEO of Myntra, Mukesh Bansal will also head the fashion business for Flipkart and join the Board. The expected announcement has led to an emergence of strong Indian e-commerce rival to the likes of Amazon and eBay.

The strong partners, one having an edge in fashion and lifestyle business and the other in technology and other product categories, will race ahead to be the leader of e-tailing market in India. Flipkart has had limited success with the high margin apparel and fashion accessories segment compared to Myntra, which has been aggressively pursuing the fashion business by bringing international labels as well as tying up with designers and launching private brands.

The common factor between Flipkart and Myntra is US hedge fund Tiger Global and venture capital firm Accel Partners holding significant shares in both the companies. Both wanted Flipkart and Myntra to merge. Tiger and Accel together own 53 percent shares, while IDG Ventures and Kalaari have a combined stake of 28 percent in Myntra. In Flipkart, the two common investors (Tiger & Accel) together hold around 40 percent stake.