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E commerce major Flipkart has made a renewed and probably a last ditch effort to acquire Snapdeal by increasing its bidding offer, according to two sources close to the development. The exact offer made by Flipkart is still not known, but several media reports are quoting the latest offer to be between $850 to $900 million dollars. The reports also claim that the latest offer is only meant for Snapdeal and its marketplace management unit Unicommerce and not for the subsidiaries like Freerecharge and Vulcan.
The most recent offer comes after Snapdeal earlier rejected two bidding offers by Flipkart, with the first being as low as $450 to $550 million. This offer created a huge embarrassment for the New Delhi based e commerce firm as it completely destroyed it’s so called unicorn status.
Interestingly, Flipkart’s latest quotation comes barely a week after another e commerce player infibeam made $1 billion dollar buyout offer to Snapdeal. Although Infibeam is yet to officially confirm the bidding offer, but analysts feel that this development may have pressurized Flipkart to expedite Snapdeal’s acquisition process.
Snapdeal’s majority stakeholder Soft Bank is reportedly desperate to seal the Flipkart offer, but is facing problems from several minority stakeholders who allege that their interest is being overlooked. Soft Bank’s desperation to make an exit stems from the fact that New Delhi based e commerce company stands a minimal chance to regain its minimal market share in the wake of fierce competition from Amazon and Flipkart.
Snapdeal, which was once touted as poster boy of India’s emerging e commerce sector, saw its market share sliding after Seattle based Amazon began aggressive marketing following its humble debut in 2013. Even Flipkart’s market share eroded significantly due to Amazon, but still managed to maintain its dominant position in the market.
