After homegrown e-retailer Flipkart acquired online fashion retailer Myntra for USD 300-350 million or nearly Rs 2,000 crore, the Indian e-commerce industry is set to give a tough competition to its global peers like Amazon .
Speaking to CNBC-TV18's Vineetha Athrey, Flipkart founders Binny Bansal and Sachin Bansal who are also COO and CEO of the company respectively, says the company shares a good relation with Myntra. The combined entities will be the largest e-commerce platform in India.
Fashion is likely to be the largest category for Flipkart in the next few years with Myntra CEO Mukesh Bansal joining the Flipkart board and will head fashion segment at group level, says Sachin Bansal.
The acquisition is 100 percent though Flipkart declined to disclose the exact valuation.
Both the companies will run independently retaining their employee strength. The combine strength of employees will now be close to 4000, which includes 3000 employees from Flipkart and 700 from Myntra.
Below are excerpts from the interview:
Q: You are looking at an investment of more than USD 100 million for the fashion vertical. Can you outline broadly, what kind of areas will those investments go into and what really lies ahead?
Sachin: The decisions on where we will invest and how much we will invest will be jointly taken at a board level and Mukesh Bansal will be leading the discussion and decisions on that. This is something we will have to get together and start deciding on.
But again the size of the investment is very important because we are very serious about the whole space of fashion in India. It is at quite an early stage compared to other segments like books and electronics that have been developing in India for quite some time now and is far away from its full potential. So, the amount of investment required should be high and the areas that require investment is something that Mukesh will take a decision on after mapping out the whole landscape.
Q: What will happen to the employees now, what kind of stock options are we looking at, is it an all-cash deal?
Binny: From Myntra employee perspective, nothing changes at all. We are not commenting on the deal structure but all the employees who have Myntra stock options will now have Flipkart stock options.
Q: Can you talk about employee strength in both the companies, and how much up will it go now with the combined entity?
Binny: The employee strength goes up from around 3000 to around 4000 fulltime employees. Flipkart has 3000 employees and Myntra has about 700 employees currently.
Q: Anything indicative that you can share, we have been hearing news that the deal is likely to be evaluated between Rs 1700-2100 crore, is that the range we are looking at?
Binny: We are not commenting on that.
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