After lurching from one disaster to another in 2016, Japan’s Softbank is hitting all the right notes this year.
Flipkart, the country’s largest e-commerce marketplace, has received an investment of $2.5 billion from SoftBank Vision Fund, giving it the much-required arsenal to continue in pole position for the next 18-24 months, as it fends off competition from global behemoth Amazon.
SoftBank’s new $93 bn Vision Fund is putting $2.5 bn into online retailer Flipkart, in the biggest private investment to date in India’s technology sector.
Snapdeal called off the USD 950 million-takeover (over Rs 6,000 crore) by Flipkart, apparently over differences in valuation and terms of what could possibly have been the largest deal in the Indian e-commerce space.
As Snapdeal vacates its number three position in the Indian e-commerce market to embark on a new independent path inspired by Chinese marketplace Taobao, will founders Kunal Bahl and Rohit Bansal turn lucky with its second avatar?
Snapdeal, the struggling Indian ecommerce company, has called off talks on a sale to rival Flipkart that had been pushed by SoftBank, its biggest shareholder. The company, which has been steadily losing market share to Flipkart and Amazon’s Indian subsidiary, said that it would seek to reinvent itself under a strategy that it dubbed “Snapdeal 2.0”.
Much before she was caught by the entrepreneurial bug, Ankita Sheth had already plunged into the world of startups. As the head of acquisitions at OYO Rooms, the SoftBank-backed hotel aggregator, she had helped its founder, Ritesh Agarwal, build up the company’s business, connecting customers with available hotel rooms across India.
With FreeCharge to be acquired Paytm and MobiKwik a distant second, there is only one clear leader in the digital wallet space currently. Paytm has surpassed several others in this segment and positioned itself well to rise the demonetisation wave.
Online retailer Flipkart Online Services Pvt. is said to be close to a merger with smaller rival Snapdeal as it looks to fend off Amazon.com Inc. Yet, that may not be enough in a battle with the deep-pocketed American giant that has caught up with the homegrown rival.
Start-ups, the playfield of the young and the restless, have had a hard reality check.
The next company that is being greenlighted to enter the prestigious Unicorn club of startups is Oyo Rooms, a SoftBank-backed budget hotel aggregator.
Indian real-estate websites PropTiger.com and Housing.com are merging to create the country’s top portal for residential listings and property services, as Rupert Murdoch’s News Corp. boosts its investment in the growing sector while Masayoshi Son’s SoftBank Group Corp. scales back.
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Mid-way through the year, something unexpected happened with Uber – the largest startup in terms of valuation. It gave up in the world’s most populous country. In an apparent move to stop a bloodbath in terms of losses, US-based Uber Technologies Inc, co- founded by Travis Kalanick, agreed to sell its China business to home grown rival Didi Chuxing. That made India, the second biggest market for Uber after the US the focal point. It was the biggest highlight for Uber in India in year 2016.
The startup ecosystem has become a hot topic for all and sundry. They have taken off and matured because of various factors such as availability of funding, consolidation activities by a number of firms, evolving technology space and a burgeoning demand within the domestic market has led to the emergence of startups.
Snapdeal recently expanded their e-commerce marketplace to include more service offerings through a ‘one-of-a-kind partnership’ with Zomato, Cleartrip, UrbanClap, and redBus. Now in a recent interview with Livemint, Kunal Bahl, CEO, Snapdeal, said that the company is now focusing on net revenue instead of gross merchandise value (GMV) and the new focus is part of another big change at the e-commerce marketplace.
On June 8, American e-commerce major Amazon announced an additional $3-billion investment in India, making clear its intention to win in the country. This throws up a massive challenge for all homegrown e-commerce companies, among which Snapdeal could be hurt the most.
In April, on-demand grocery delivery service PepperTap shut shop. Recently, online beauty services provider Amber Wellness, which was operating in Bangalore, New Delhi and Mumbai, closed down.
But these are not isolated cases. In 2015, around 13 startups closed operations. And others, such as food technology startups TinyOwl and Zomato, scaled down last year. Between the two companies, more than 400 people lost their jobs last year.
Hike Messenger’s new office at the Aerocity in Delhi was designed by Kavin Mittal, its 27-year-old CEO. That is in keeping with Mittal’s career choices; he chooses to build his own things. He could have joined any of the several businesses of Bharti Enterprises, which his father Sunil controls. But Kavin Mittal chose to build a new one, though he kept it under Bharti’s equal-stakes venture with Japan’s telecom and Internet giant SoftBank.
Around two years ago, India’s technology startup space was dominated by American investors such as Tiger Global and Sequoia Capital. But it all started changing in October 2014 when Japan’s SoftBank announced investments of around $800 million in two Indian startups—online retailer Snapdeal and ride-hailing startup Ola.
Why is taxi-hailing app Uber doubling down in India and China? Last month, the San Francisco-based company closed $1 billion in fresh funding, raising its valuation to $50 billion-plus. The fund-raising coincided with its announcement that it was going to invest $1 billion in India over the next nine months. Only the previous month, Uber had bared its intentions to pump in $1 billion this year into China to play catch up with Didi Kuaidi, which has reportedly outgunned the US challenger in that huge market.
With enhanced technological advances and constantly depleting natural resources, there is an increasing need for companies to factor in alternative energy resources while not just devising new industry solutions, but also in planning organization’s sustainable future. Enterprises are now seeing the need to reduce carbon footprint and cut down energy costs to improve productivity and efficiency, but beyond that, it is essential for them to explore the opportunities in implementing renewable energy solutions.
Sure eTailing is growing by leaps and bounds. But eTailers are booking more losses than profits. Deep discounts and returns are a downward spiral they can’t pull out of by Vishal Krishna & Abraham C. Mathews
This scene repeats every day. Every morning, trucks loaded with crates of unsold and damaged goods returned by e-commerce companies and other retailers are brought to a 2,00,000 sq. ft. warehouse of Reverse Logistics (RLC) at Tumkur Road in Karnataka. These goods are then cleaned up, refurbished and then sold on RLC’s stores and website greendust.com.
In a bid to strengthen their presence in the e-commerce sector, large players such as Amazon, Snapdeal and Flipkart are likely to look at acquiring companies with niche, differential capabilities, say industry analysts.