E-commerce consolidation – Flipkart buys Letsbuy!

Its not even a full week since the entry of Amazon in the guise of Junglee.com in India. Now comes the news that Flipkart has decided to buy out Letsbuy.com! courtesy MediaNama.com. That comes as a big surprise since the two were competitors and Letsbuy was another e-commerce  which was in the race. It was clearly the No.2 in the absence of any big names making a dent in the market place.

This development brings us to a very important issue of scale and size especially considering the fact that Amazon once it gets the customers to Junglee.com can always roll out the Amazon Indian version and the Indian consumers will be more than happy to embrace the services.

What Amazon has done in the ecosystem is to consolidate the competition especially the No. 1 and No. 2 and make them a bigger entity in terms of size and service and more so in terms of products. It should also be noted how they are at different spectrum with respect to product portfolios.

Letsbuy has been into electronics and has had a loyal customer base while Flipkart starting with books has been on a roller coaster ride till ofcourse Junglee was launched. @madmanweb was quoted as saying he was waiting for Flipkart to sell groceries!  Like I had mentioned in my earlier blog its interesting times for the Indian e-commerce industry and that has already started!

As we witness the competition on one side, the consolidation of the industry will separate the serious big players from the me-too brands in the e-commerce sphere.

R Senthilkumar