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It’s Final! Snapdeal Has Rejected Flipkart’s Offer; Will Fight Alone!

After weeks of speculation and rumours, it final! Snapdeal has now rejected an offer to get acquired by Flipkart and have decided to fight the eCommerce war alone. They are now planning to pivot into a Taobao kind of an open marketplace

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Snapdeal New Logo Red white packaging

Ending weeks of speculation and doubt, Snapdeal has decided to kill all merger talks with Flipkart and others. In a bold, and somewhat brave decision, Snapdeal has decided to pursue an ‘independent’ path, wherein they will fight the eCommerce battle alone.

This also ends all rumours about incoming ‘consolidation’ in the e-commerce sector.

In their official statement, Snapdeal said, “Snapdeal has been exploring strategic options over the last several months. The company has now decided to pursue an independent path and is terminating all strategic discussions as a result,”

Calling themselves as Snapdeal 2.0, the statement infuses a new way and a new future for Snapdeal. The statement said, “Snapdeal’s vision has always been to create life-changing experiences for millions of buyers and sellers across India. We have a new and compelling direction – Snapdeal 2.0 – that uniquely furthers this vision, and have made significant progress towards the ability to execute this by achieving a gross profit this month.”

How Will Snapdeal Survive?

As per incoming reports, it seems that Snapdeal won’t depend on external funding (not at least right now), and use other alternative means to sustain themselves.

Sale of some assets is on the cards as well.

The statement said: “In addition, with the sale of certain non-core assets, Snapdeal is expected to be financially self-sustainable..”

SoftBank, which is the primary investor, and majority stakeholder in Snapdeal too hasn’t revealed any fresh infusion of funds into the company.

However, they seem to support Snapdeal’s vision, and enthusiasm, as they issued a statement saying, “Supporting entrepreneurs and their vision and aspirations is at the heart of Masayoshi Son’s and SoftBank’s investment philosophy. As such, we respect the decision to pursue an independent strategy. We look forward to the results of the Snapdeal 2.0 strategy, and to remaining invested in the vibrant Indian e-commerce space,”

This way, Snapdeal has rejected Flipkart’s offer of $850-900 million, at a time when they are in desperate need of fresh funding. Snapdeal has already fired the majority of their employees and even left a prime office space to cut expenses.

Things Which Led To Snapdeal’s Rejection Of Merger

Last week, after Freecharge was acquired by Axis Bank, co-founder Kunal Bahl wrote an emotional letter to all employees, asking them to charge up and brace for turbulent times.

At the same time, he also expressed confidence in the eCommerce sector and promised them a major change in the coming days.

This letter indicated to us that maybe the merger between Flipkart-Snapdeal is taking time, hence this emotional letter. But no, now it is clear that the reason was something else.

Besides, starting late last week, rumours started floating that Softbank, the majority stakeholder in Snapdeal, has threatened to walk-off from the merger if the minority shareholders don’t support the merger. Some shareholders were objecting to the payout to be received by the founders, post-merger.

Earlier, rumours also came in that Snapdeal wants Infibeam as a possible partner for the merger, rather than Flipkart, due to strict terms and conditions being put forth by them.

Do you think this was a good decision taken by Snapdeal? Will they be able to create a turnaround story? Do let us know your views by commenting right here!

"It’s Final! Snapdeal Has Rejected Flipkart’s Offer; Will Fight Alone!", 5 out of 5 based on 5 ratings.
  1. Shibam Kar says

    That’s right. But the problem is, due to low funding they also shut down their affiliate program which is causing huge loss of coupon companies in India. They should start their affiliate program as soon as possible, even with low rate.

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