At the end of May this year, the news broke that Flipkart—India’s largest e-commerce company—had acquired the online apparel store Myntra for between $300 million and $330 million, the largest deal to date in the history of India’s nascent e-commerce sector. Journalists compared the deal to the American e-commerce giant Amazon’s 2009 purchase of clothing and shoe e-retailer Zappos for $1.2 billion. In fact, Flipkart’s founders, Sachin Bansal and Binny Bansal (they are not related), are former Amazon staffers who quit their jobs in 2007 to launch their company.
However, at a press conference announcing the deal, Sachin discounted this comparison with Amazon. “Our role model today is actually the Alibaba Group more than Amazon,” he said, referring to the Chinese internet behemoth, which made business headlines when it filed documents in preparation for its IPO, expected to be in August. Experts have claimed that Alibaba could be worth around $200 billion by the end of the year, far more than Amazon’s current market cap of around $154 billion.
But there is more to the Bansals’ disavowal of Amazon comparisons than their aspirations to Alibaba’s scale. Since Amazon’s India launch in June 2013, the company has become Flipkart’s primary competitor. Many believe the Myntra–Flipkart deal is a sign that the companies are ramping up to hold their own against Amazon. As Abhash Kumar, a writer who covers e-commerce for YourStory.com, a Bangalore-based business website, put it to me: “Rather than have a three-way fight between Flipkart and Myntra and Amazon, why not consolidate both of them, and just fight off Amazon?”