E-Commerce Portals On Consolidation Spree – Amazon Factor?

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Amazon.com has given wake up call to Indian online portals to consolidate their worth for remaining competitive in lucrative online business.

Amazon, the world’s largest online retailer, is also hastening the consolidation by its measured moves into the Indian e-commerce market, which is expected to grow to $25 billion by 2015 from $10 billion now. The US-based company has opened a warehouse, won permission to start a courier service and recently launched comparison shopping site Junglee , featuring products from most Indian online retailers.

Group buying portal Snapdeal, one of the country’s largest online retailers , is in advanced talks to acquire an e-commerce company. Snapdeal, which raised Rs 190 crore last year in one of the biggest fundraising deals by an e-commerce firm, is looking to buy a small-to-mid-size portal that will allow it to expand beyond the group buying space. The Delhi-based company’s moves will be in line with the rapid evolution of the e-commerce industry, which is poised for strong growth as well as consolidation.

Just last week, Flipkart announced that it was buying consumer electronics retailer Letsbuy in a cash-and-stock deal estimated to be worth $20 million. Snapdeal  last acquired a company in June 2010, when it bought Bangalore based group buying site Grabbon.com for an undisclosed amount.

In the coming days, we shall come across such news of amalgamation quite often. There was lot of hullabaloo about megastores opening their brick and mortar shops in India, but no body has anticipated the threats these online stores will pose to the shopkeepers in the coming time, because they will make shopping convenient and pleasant as you can shop while sipping tea or coffee with your family and save the hassles of spending time and money to go to different shops!

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