India’s biggest online retailing site, Flipkart, has become the latest business to announce that it has signed a deal to buy rival Snapdeal, the world’s largest online retail marketplace.
In a joint statement, Snapdeal and Flipkarts Chief Executive Officer, Rohit Bansal, said they have agreed to share data and technology.
Snapdeal had been seeking to acquire Flipkarter, which had also been trying to acquire Snapdeal for a year, after its merger with Flipkarmas parent Flipkantel, which was announced in March this year.
According to the Indian business daily Business Standard, Snap has said it will buy Snapdeal’s 75% stake in the Indian company.
In India, Snap and Flip’s share of the e-commerce market rose to around 11% in the fourth quarter of this year from 5% a year ago.
The Snapdeal deal, which would be the largest e-retailer deal in the country, could potentially create jobs in the IT sector.
Snap’s deal with Flip is likely to add to a growing list of deals that Snap has struck with e-tailers in recent months, including a deal that would have bought the mobile payment service Venmo.
Flip’s CEO has been a vocal critic of Snapdeal as a platform for illegal payments and a platform that is a threat to the business model of Snap.
Snap has struggled to make inroads in India and has been heavily criticised by the government and by the industry.
It has also faced regulatory scrutiny, including by the Financial Services Regulatory Authority of India, which has been trying for a regulatory crackdown on online shopping.
Snap said that it will take a “long-term view” on its e-Retail business and its strategy in the sector.
“Our strategy is to develop a platform of value-added and real-time commerce, which we believe will help Snapdeal meet the demands of the growing online commerce market.
The agreement with Snapdeal will allow us to leverage its expertise in this area,” Bansal said in the statement.
Flipkarta had raised $1.3 billion from Sequoia Capital in January.
In its announcement, Snap said the deal will be completed in three to five years and that it would have its largest customer base in the Asia Pacific region, with 25 million active customers.
Snap was not available for comment.
The deal is the latest in a string of moves by online retailers to invest in India, where the country has seen a surge in demand for their products and services.
India has also become a key destination for foreign investors looking to set up and scale their online businesses.
Last year, Snap announced it would build a second office in Bengaluru and said it was going to set a focus on logistics in the capital.
The Bengaluru office will have offices in the US, Singapore and China.
Snap, which launched in India in 2016, has over 50 million monthly active users and has said that its business will expand to other parts of the world in the near future.
Snap says it plans to build an ecosystem of products and online payments, and said its focus is on “transforming retail with the promise of a new future.”