Kunal Bahl is pretty amused. And here’s why. A tech journal carried an exclusive report that “Snapdeal has initiated preliminary talks with staunch rivals Flipkart and Amazon to explore a possible merger that could realign the country’s ecommerce industry.”
This prompted Kunal to tweet that the report was baseless. However he jested that he would probably do it for an exciting name like Snapkartazon!
Snapkartazon! Baseless but I would do it just for the exciting name which seems out of Star Wars! Or like a medicine https://t.co/k9cJKr496F
— Kunal Bahl (@1kunalbahl) August 18, 2016
But Kunal did not stop here. In a mail to the Snapdeal team, he spoke about how such things “are becoming a humorous endeavour by select journalists looking for the page views that are seemingly eluding them.”
What baffled or rather irked Kunal was the fact that despite the fact “that when key parties deny a speculation, how is it still news?”
After all, the article itself stated clearly-
“Both Flipkart and Snapdeal, run by Jasper Infotech Pvt. Ltd, have denied holding any talks.
“This is completely false and baseless,” a Flipkart spokesperson said in response to email queries.
A Snapdeal spokesman said the company has had no such discussions with anybody at any point in time. “Your so-called ‘news’ is baseless and we categorically deny this speculative, unfounded story,” the spokesman said.”
No wonder, Kunal stated in his email,“I have realised that it’s not worth our time explaining our position to them.” What mattered, according to him, was the fact that Snapdeal has a super crystal clear strategy which it is executing on and making absolutely phenomenal progress on. And he wants his team to stay focussed on that. He goes on to add that:
Btw – I really doubt anyone is merging with anyone in this market given all companies have their hands full and nobody wants to solve the other guy’s problems by merging two businesses.
Kunal’s amusement or ire, whatever one may choose to call it is but natural. These are testing times for all ecommerce companies in India. Amazon is ruthlessly making inroads in India’s ecommerce turf, and both Flipkart and Snapdeal have been trying to raise more funds. These are times of falling valuations, intense competition and mounting pressure from investors on ecommerce companies to set right their loss making models.
To add to that, each one is involved in its own tussles. Logistics firm GoJavas, which is partially owned by Snapdeal, temporarily suspended operations this month and is caught in a tug of war for acquisition, with Pigeon Express on one side and Snapdeal on the other.
Flipkart is fighting its own wars to fix its loss-making business model. It might have won the race for Jabong but last month it also decided to let go of underperforming employees in a bid to have a leaner organisation structure, and make better utilisation of its cash resources.
To add to these challenging times, the air remains rife with rumours. This week, it was reported that Chinese ecommerce giant, Alibaba, which owns 5% stake in Snapdeal, has reportedly held discussions to acquire online marketplace ShopClues. In February, reports had emerged that it was looking to invest in Indian ecommerce major Flipkart.
Hence, every day is a new day when it comes to who will be acquiring whom in the ecommerce business and it is not Kunal alone who is entertained by it. If last year, the ecommerce sector was booming, this year for sure it is amusing. But one thing is sure – with such cut throat competition and huge losses staring in the face of ecommerce companies, it is an undeniable reality that while some of them will shape up, others will have to ship out.
As they say, let the games begin – so stay tuned for more news on Snapkartazon!