Flipkart to Acquire LetsBuy.com

flipkart_letsbuyIf you are buying online in India, there is a good chance you have purchased something from Flipkart or LetsBuy. Both were competitors in India but that might soon end.

According to this report by Medianama, Flipkart is acquiring LetsBuy.com for $15 to $20 million. This will make Flipkart the undisputed leader of online retailing in India.

This announcement gains another perspective in the backdrop of Amazon making plans to move into the online retailing business. It has already launched Junglee.com, a price comparison website.

Will it drive up prices on Flipkart?

LetsBuy has the reputation of being aggressive about pricing while Flipkart concentrates on delivery. Usually with no competition in sight, Flipkart might be tempted to drive up prices. But it can hardly afford to do that as Amazon’s entry into the market might be around the corner.

Here is a graph from Google Trends comparing interest from India in Amazon, Flipkart and LetsBuy.

google_trends_india_retail

The graph clearly shows that even if Amazon is not yet in India, there is immense interest about it which almost matched Flipkart at times in the last 12 months. So Flipkart will have its work cut out to keep improving its portfoilio and infrastructure.

Flipkart’s Ace

Flipkart has done something that most online retailers did not do before them. This was to take a leap of faith with the ‘Cash on Delivery’ payment model. Most Indian users are not comfortable putting out personal data like bank details and credit card details online to buy things. Flipkart also leverages ‘Cash on Delivery’ model in its advertisements. Any new entrant in India, even if it is Amazon, will have to get into the Indian online buyers psyche before hoping for success.

What are your views on the state of online retailing in India? Do drop in your comments.

6 replies on “Flipkart to Acquire LetsBuy.com”

  1. Flipkart and Letsbuy have their own different advantages. I always compare Flipkart and Letsbuy prices. If a price of the thing is same on both places, I prefer Flipkart, as their delivery service is just amazing! But when it comes to electronics equipments, Letsbuy is a better choice, as their prices are often low compared to Flipkart and they have one decent, good delivery service. I would feel sad if Flipkart acquires Letsbuy. They have one very good healthy competition.

    1. Yes, in the short term healthy competition is down. But atleast because of the Amazon threat, Flipkart wont take their customers for granted.

  2. Delivery in flipkart.com is awesome. They sent a book worth 88 rs via speedpost (charge 50 rs) and apology mail for delay of book delivery due to out of stock.

  3. I have given the order and waited for 1 month of delivery after many emails & reminder I have to ask for refund. That I got after 2 months of arguments & reasoning with them. Before going to Flipkart, I tried in the market it was available at 3000, but after cancellation by flipkart order I have to purchase from the market at 5000. Really very poor customer support by Flipkart.

    I will never come back to flipkart not recomend anybody for the same as it won’t give warranty of the product too & poorest customer care. They are big frauds…

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