Evolution is now in the DNA of retail/ eRetail industry. Every now and then we see something new happening in the industry as being an old-school is so not going to help. As consumers today prefer real time and user-friendly shopping experience in both online and offline modes, these retail/ eRetail firms, betting on the trend, are developing taste to serve their consumers in every nook and corner of the model. From eCommerce to mCommerce to hyperlocal and now on-demand, the space has seen enormous evolution since inception.
Startups today are not just redefining shopping experience, but are also performing miracles in terms of consumer engagement and spreading out their geo reach. The real retail revolution kicked off with the launch of an online platform for selling books known as Flipkart which later changed the fate of the industry and also the way we live. The journey of Flipkart started with its founders rambling across the roads of Bengaluru to produce orders from small distributors. Who could have ever imagined it to be a $100 billion company with country’s oh sorry! world’s biggest retail giants willing to join forces to expand their reach and consumer-base.
Association, a term that has played a pivotal role in changing the retail dynamics in the country has now became a core mantra for every major retail/ eRetail players in order to strengthen their roots in the industry. Associations, partnerships, mergers, acquisitions have brought retail a long way. It has also brought offline and online (the two worlds of retail) together termed as omni-channel or multi-channel retailing. Many brick-and-mortar retailers reckon eCommerce tie-ups as a boon to inflate their business in tier II and III cities of the country which was not happening with their offline model. Accepting the same, many eRetailer have gone ahead and joined hands with brick-and-mortar retailers in order to portray themselves as an authentic marketplace with legitimate products in its array.
Such mergers have indeed changed the shape and magnitude of both or either of the companies. Here are some of 2016 biggest online- offline mergers that set an example worthy of following:
Future Bazaar & Fabfurnish
In one of the biggest merger stories of 2016 comes, Kishore Biyani’s Future Group taking over the online furniture and home furnishings store FabFurnish.com in an all-cash deal. For Future Group, the move is an ante to combat Swedish furniture retailing giant IKEA as the foreign brand is all set to entre India by the end of 2016.
Future Group is really running high on its expansion spree and it’s also speculated that the online fashion retail brand Jabong and online food ordering platform Foodpanda may be the next on its sale list.
Flipkart & PhonePe
Earlier this month, India’s largest eCommerce portal Flipkart acquired PhonePe, an online mobile payment company founded by Flipkart ex-employees for an undisclosed amount. Though the company will operate as an individual entity but, with this acquisition Flipkart aims at becoming the checking house for merchant payments after collecting cash from consumers.
Currently Flipkart is aggressively looking at driving innovation on the payment front and has also roped in FX Mart, a prepaid wallet license that would allow its customers to use the money stored in the wallet to buy goods on Flipkart platforms and other associated partners.
Godrej Consumers & Strength of Nature
Moving to the consumer goods vertical, one of the biggest mergers that took place this year was of Godrej Consumers Products Limited and Strength of Nature LLC (SON) a hair care products company for women of African descent.
This acquisition comes as move to accelerate GCPL’s international “3 by 3” strategy and strengthen its presence in Africa. The acquisition is expected to be earnings per share (EPS) accretive for GCPL from year one itself.
Paytm & Shifu
Another strategic merger comes from Noida-based mobile payment turned eCommerce player Paytm. Recently the company has brought a consumer behaviour prediction and recommendation platform Shifu for $8 million. It mines the smartphone usage patterns of users and makes personalised recommendations to them.
Paytm has recently been very peculiar about investing in the startup ecosystem of the country. These investments include taxi hailing service, hyperlocal apps and home service marketplace etc.
Oyo Rooms & ZO Rooms
The news came as a shocker to the industry when the budget hotel booking app backed by Softbank Corp acquired its immediate rivals Zo Rooms in February this year.
The deal came after 3 months of negotiations and supposed to be an all-stock acquisition where investors got a 7 per cent stake in the combined entity. The merger came amid a slowdown in start-up funding as investors are becoming increasingly risk-averse and unwilling to fund start-ups that aren’t market leaders in their respective sectors.