Indian e-Commerce portal Snapdeal buys online sports retailer

4 April 2012 (Last Updated April 4th, 2012 03:18)

Indian e-Commerce retailer Snapdeal.com has acquired online sports goods retailer Esportsbuy.com, mirroring rival Flipkart's acquisitive approach.

Indian e-Commerce retailer Snapdeal.com has acquired online sports goods retailer Esportsbuy.com, mirroring rival Flipkart's acquisitive approach.

The retailer has paid Rs500-750m ($9.84-14.76m) to buy Esportsbuy.com, founded by Amit Monga and Prateek Agarwal in 2011, reported The Times of India.

Snapdeal chief executive officer Kunal Behl has confirmed the acquisition but declined to provide financial details.

"The acquisition will help us expand our operation and strengthen our presence in sports retailing on the web given that there any hardly any organised retailers in the sector so far," Behl said.

To fund the latest acquisition, the retailer has used a part of the Rs2bn ($39.36 m) it raised in 2011 from venture funds Bessemer, Nexus and Indo-US Venture Partners in a transaction that valued the firm at Rs10bn ($195.96m).

The latest transaction is Snapdeal's second acquisition since it was established in February 2010.

In June 2010, the retailer has acquired Bangalore-based group buying site grabbon.com for an undisclosed amount.

Online retailers have sprung up in India's e-Commerce market, which will quadruple in size to $24bn by 2015, according to an estimate by Avendus Capital.

Recently, Indian e-Commerce retailer Flipkart has bought electronics retailer letsbuy.com for about $20m, its fourth acquisition to bulk up its portfolio.

However, the online retailers are reportedly battling price wars, high customer acquisition costs and the looming threat of Amazon, which is expanding presence in India.

In February 2012, e-Commerce giant Amazon has entered Indian market with the launch of an online shopping service, Junglee.com.

"The market is shrinking and witnessing a lot of consolidation. It's a good time for companies who have a scale and capital as they can buy out to expand operations," Behl said.

Founded in 2010, Snapdeal is estimated to have clocked revenues of about Rs100m ($1.95m).