Written By SOURAV MAJUMDAR

We all know of the e-commerce battleground and the eyeball-to-eyeball confrontation between global giant Amazon and homegrown Flipkart. But an equally intense battle is unfolding behind the scenes: that’s for the top slot in the highly competitive online fashion sweepstakes. That the big boys in the e-commerce game will be locked in a fight to the finish on the fashion front is not without reason. At last count, the size of the Indian online fashion market was pegged at $4 billion, projected to grow 3.5 times to touch $14 billion by 2020. And that’s not all. Globally, online fashion retail is one of the largest categories in e-commerce and the same trend is visible in India, as more and more people log in to shop for clothes and accessories. Online fashion retail is also pretty much a battle between Amazon and Flipkart, with one little twist. Flipkart also has the Myntra-Jabong combine under its belt–the result of two acquisitions which demonstrated Flipkart’s seriousness about the fashion business–and the smallest player currently seems to be winning.

Our cover story, written by Deepti Chaudhary and Debojyoti Ghosh, takes a detailed look at what’s at stake in the online fashion retail faceoff. With gross merchandise volume (GMV) set to touch $1.85 billion by FY19, Myntra is in pole position, followed by parent Flipkart, which expects to finish FY19 with revenue of $1.6 billion. Amazon, with its legendary deep pockets, has some catching up to do, though its fashion business in India is also witnessing a very rapid pace of growth. Amazon Fashion is one of the top three stores on Amazon.in. The e-commerce giant saw an 80% growth in fashion in 2017, and the year before had seen growth of 100%. So clearly, the global giant will soon be snapping at the heels of Myntra and Flipkart. And that’s exactly what makes this fight so compelling to watch. Amazon is battling Flipkart in the larger ‘affordable’ fashion space, and taking on Myntra in premium fashion.

Meanwhile, Myntra is upping its game aggressively, using a combination of technology and fashion innovations which its chief executive, Ananth Narayanan, believes will keep the fashion e-retailer ahead in the game and even win against Amazon. The strategy, Narayanan says, is to innovate on three fronts: selection, service, and customer engagement. But retail consultant Devangshu Dutta, who describes Amazon as “relentless”, feels it’s a matter of time before the U.S. giant picks up pace even quicker, given that the margins tend to be high in this segment.

The online fashion story apart, another one I would urge you to read is about how the husband-wife duo of K. Ganesh and Meena Ganesh have put together a virtual ecosystem of exciting startups through their platform GrowthStory. The serial entrepreneur couple, known for their earlier venture TutorVista which they later sold, are entrepreneurs in the finest tradition.

Set up in 2011, GrowthStory today runs as many as 13 companies, mainly in the consumer Internet space, with successful brands like online grocery firm BigBasket, home healthcare provider Portea Medical, and online jewellery store BlueStone among them. The Ganeshs are different from your ordinary VCs in that they not only bring in investments but also put in place founding teams who then work as co-founders. We like to call GrowthStory a billion-dollar startup factory

Source: fortuneindia

Written By Varsha Bansal, ET Bureau

BENGALURU: US-based online retail giant Amazon has thrown its hat in the ring to acquire India’s largest online retailer Flipkart as it looks to counter rival Walmart Stores’ attempt to gain a significant foothold in the market. Amazon and Flipkart have initiated talks a few weeks ago for an acquisition even though a bid is yet to be submitted, according to two people familiar with the development.

US-based retail giant Walmart Stores, which has been in discussions with Flipkart for over two months, continues to be the most likely contender but is negotiating on the price of secondary shares.

Walmart is looking to acquire the secondary shares in Flipkart at a valuation of $10-12 billion, which is much lower than the expectation of Flipkart’s investors who want their shares to be acquired at closer to the primary round valuation of $20-22 billion, according to one of the sources mentioned above. This has led to Flipkart board agreeing to open up conversations with other potential suitors — including Amazon India. “Amazon and Flipkart have been talking for a few weeks now but it hasn’t progressed as much as Walmart talks which have been going on for two months,” said the second source mentioned above, adding that a transaction with Walmart is the most likely outcome. “With Walmart they can run it as an independent company and Flipkart legacy can continue.”
For a transaction to go through, “Amazon’s offer has to be as good as Walmart’s,” added this source. Walmart did not respond to queries sent by ET at the time the story went to press. Flipkart declined to comment and an Amazon spokesperson said “we do not offer comments on rumours and speculations.”

Mint reported about the latest discussions between Flipkart and Amazon on Wednesday. ET had reported about similar discussions between Amazon and Flipkart in March 2016. ET was the first to report on Walmart being in advanced talks to pick up a stake in the ecommerce company in its January 31 edition. Walmart has been aggressively expanding its presence in the US online retail market to take on Amazon after buying Jet.com for $3 billion in 2016. But an acquisition of a majority stake in Flipkart would be its biggest investment in the online space as it looks to build an omnichannel play.

Walmart has taken time to get its strategy right in India, a market where rival Amazon has made plain its aggressive intent, having committed investments of over $5 billion to build logistics infrastructure and also woo customers with hefty discounts and selected offerings including Prime Video. Walmart, which had aggressively lobbied the Indian government for an open market for foreign retailers in the past, adopted a morecautious stance after the breakdown of its joint venture with Bharti Enterprises five years ago.

Experts tracking this space believe that a possible Amazon-Flipkart deal could raise objections from the industry about the duo cannibalising the ecommerce market. Moreover, a possible Amazon-Flipkart acquisition could lead to a close scrutiny by the Competition Commission of India (CCI).

“My sense is that a transaction between these direct competitors, given their size and presence will need to be approved by the CCI and in that process is likely to be more closely scrutinised in comparison to a Walmart-Flipkart deal,” said Ravisekhar Nair, partner, Competition Law at ELP. “That said, the CCI has never blocked a transaction in the last seven years that we know of. So, the CCI, after reviewing the transaction can potentially approve it subject to structural and/or behavioural commitments.”

Other experts also said that there could be objections about two large competitors who have impacted other retailers through aggressive promotions and discounts, India’s retail market is still large. “The defence would be that ecommerce is still a tiny fraction of India’s retail market,” said Devangshu Dutta, chief executive of retail consulting firm Third Eyesight.

Source: economictimes