Valuation to too many demands: Why Snapdeal-Flipkart merger is dragging

The Snapdeal-Flipkart merger has turned into the most complex acquisition negotiation

Indian Companies News : In the universe of Snapdeal and Flipkart everyone is hopeful, but of different things. Japanese telecom giant SoftBank and US hedge fund major Tiger Global are hopeful of merging the two e-commerce players. Snapdeal’s board members, such as Nexus Venture Capital, and smaller shareholders are hopeful of a better-valued exit, and the co-founders Kunal Bahl and Rohit Bansal are hopeful of holding on to their company.

The clash of hopes is what has kept the ‘biggest consolidation in Indian e-commerce history’ from becoming a reality. After five months of discussions, the Snapdeal-Flipkart merger has turned into the most complex acquisition negotiation.

Stonewalling deal

In his last email to FreeCharge employees as the top boss, Bahl, buoyed by the sale of the mobile wallet to Axis Bank, said the deal provides them the necessary boost in resources to continue the journey towards building an e-commerce platform.

Axis Bank last week announced it had bought the mobile payments wallet provider from Snapdeal for Rs 385 crore ($60 million).

According to sources close to Snapdeal, the co-founders are actively working towards a ‘Plan B’ and have taken into confidence most of their senior management. According to sources, the two have been fighting SoftBank, the biggest investor in the company, 'tooth and nail’ to prevent the deal from happening.

“They are going to fight the deal till they can. The kind of U-turn SoftBank took last year has left them flabbergasted. First SoftBank asked them to rebrand, spend money on marketing, promising all along that more investments are on way and then they suddenly left them high and dry.(more)

UDAN scheme: TruJet to add 10 destinations with 7 aircraft

The airline started operations in July 2015, currently catering to 7 destinations with 16 flights

Hyderabad-based TruJet, one of the private airlines, which has bagged travel routes under UDAN (Ude Desh ka Aam Naagrik) scheme is planning to add 10 destinations with seven aircraft.

The airline started operations in July 2015 and is currently catering to seven destinations with 16 flights.

Antara Dey, spokesperson of the airline said that over the next two years, the airline is planning to add 10 destinations with seven aircraft. Of this, five will be under UDAN scheme, including Mysore, Bidar, Hosur, Salem and Vidya Nagar.

Alliance Air, the regional arm of Air India, SpiceJet and TruJet have won rights to operate flights under the government's regional air connectivity scheme, which seeks to give people from Tier-II and Tier-III cities a chance to fly at a ticket price of Rs 2,500.

Company News : Airlines operating under the UDAN scheme have to ensure that the prices of at least 50 per cent of the seats on their flights are available at a price of Rs 2,500 each for an hour of flying.

The Centre and state will provide viability gap funding for the airlines operating on the UDAN routes to ensure profitability of these flights.

Trujet is planning to deploy ATR72-500/600 with a 72-seat capacity.

Dey, mentioned earlier, said that the airline is looking at 77 per cent PLF (passenger load factor) and expects to make money in a year.

She added that the airline is funded directly by promoters and do not have any plans immediately to look at external funding. (more)

Truecaller in talks with start-ups

In an effort to tap on the start-up system in India and open a new revenue stream, phone number identification app Truecaller is planning to get into tie-ups with e-commerce giants such as Snapdeal, Flipkart and other online players which require phone number verification on their customers and other related services.

The company also said they hope to have 200 million users in India by the end of this year. Currently, they have 120 million users in the country, which is the company’s biggest market. It has 200 million users globally.

Alan Mamedi and Nami Zarringhalam, founders of the Stockholm, a Sweden-based company founded in 2009, are in India with a number of StartUps. Last month Truecaller introduced a new software development kit (SDK) on Thursday that lets third party applications verify users via phone numbers. “We want to personlise e-commerce for the users and that is where we want to pitch in. We want the company and the customer to be connected better, starting from first contact to last-mile delivery,” said Mamedi.

TrueSDK, a software development kit is the first product from the company for the app developer community that enables third-party apps to easily on board users with their existing Truecaller profile and verified phone numbers. Developers can use the service to sign up, update user information, or verify user's phone number identity in their mobile apps through user consent.

“TrueSDK for us was the first stepping stone and the reason we built it was a lot many developers asked us on how they could use Truecaller. They asked why they have to build an infrastructure around verifying phone numbers and bear the cost of doing the same, when someone else has already done so as Truecaller is a directory of verified phone numbers,” added Mamedi. 

While Mamedi did not give out any names but sources in the company said that they have had talks with a number of companies including major e-commerce players such as Flipkart and Snapdeal to get into tie-ups with them

“We have had a series of engagements with a number of start-ups including e-commerce companies in topline category and they have shown a lot of interest in the product,” said Kari Krishnamurthy, Vice President, Growth and Partnerships, Truecaller.

Mukesh Bansal logs out of Flipkart

Mukesh Bansal, who was heading the commerce and advertising business of Flipkart, quit on Wednesday, weeks after the co-founder of the country’s largest e-commerce company, Binny Bansal, became the chief executive officer.

Flipkart also lost another senior executive, Ankit Nagori, its chief business officer.

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Snapdeal won't renew Aamir Khan's contract as brand ambassador

Indian e-commerce major Snapdeal.com has decided against renewing Bollywood superstar Aamir Khan’s contract as brand ambassador, The Economic Times reported Friday.

The one-year deal ends later this year.

"It was extendable by a year but the company decided against it," one of two sources that the newspaper spoke to said. It was not immediately clear whether Snapdealwould replace Khan with another celebrity.

The Economic Times said Snapdeal didn't respond to its questions, while it couldn’t reach Khan for comment.

Marketing industry experts ET quoted said that the move by Snapdeal likely stemmed from Khan’s comments last year about growing intolerance in the country.

Promising a seamless user experience

With e-commerce players in India wooing buyers by offering  heavy discounts, delivering a superlative consumer experience to time strapped and low on loyalty consumers is becoming all the more critical from the word ‘go’. Also, chances are higher that unlike a brick and mortar store where an unsatisfied customer tends to move on to a different store to pick up the brand that she desires, the same customer facing glitches on an e-commerce website will not think twice before hopping on to a competitor’s website. Recognising, this key behavioural pattern of consumers, e-commerce players are investing heavily in improving the user interface (UI) and user experience (UX) for consumers.

For instance, Jabong launched a new user-centric and responsive-designed app/website in August 2015. It launched the user-centric new design across front-ends, be it web, mobile web or apps. The base architecture of separate front-end and service-oriented architecture helps it in launching apps for new form factors like mobile and tablet, and all kinds of internet of things devices. The move has seen the online fashion retailer’s conversion rate going up by 12 per cent, meanwhile its bounce rate has gone down by almost 16 per cent.