India's Snapdeal Calls Off Talks -- WSJ
This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (August 1, 2017).
NEW DELHI -- SoftBank Group Corp.'s attempt to merge India's two biggest homegrown e-commerce companies to compete with Amazon.com here hit a roadblock.
For months the Japanese conglomerate has been pressing Snapdeal.com, in which it owns a stake, to combine with market leader Flipkart Ltd., according to people familiar with the matter. But Snapdeal said Monday it is calling off the talks.
"Snapdeal has been exploring strategic options over the last several months," the firm said in a statement. "The Company has now decided to pursue an independent path and is terminating all strategic discussions as a result."
SoftBank said it respects Snapdeal's decision and looks forward to "remaining invested in the vibrant Indian e-commerce space."
A Flipkart spokesman declined to comment.
Snapdeal last week sold its digital-payments platform, FreeCharge, to India's Axis Bank Ltd. for around $60 million. The infusion of funds means Snapdeal should become cash-flow positive soon, said a person familiar with the matter.
Analysts say Bangalore-based Flipkart leads India in online sales, but both it and New Delhi-based Snapdeal have been losing ground to Amazon, which has grown quickly since arriving in India in 2014 armed with slick advertising and technological know-how.
SoftBank, which in 2014 invested $627 million in Snapdeal, in May launched the world's biggest technology fund, a nearly $100 billion vehicle to invest in emerging fields and promising markets.
U.S. companies like Amazon, Facebook Inc. and Uber Technologies Inc. have been expanding quickly in India, eager for a foothold in an internet economy that is growing as legions of people access the web for the first time, taking advantage of inexpensive smartphones and data plans.
The value of India's e-commerce industry should triple between this year and 2021 to $63.5 billion, said Satish Meena, an analyst at research firm Forrester.
contributed to this article.
Write to Newley Purnell at newley.purnell @wsj.com
(END) Dow Jones Newswires
August 01, 2017 02:47 ET (06:47 GMT)