Flipkart has acquired smaller rival Letsbuy in a move to consolidate its position against Amazon, after the latter's recent entry into the country's lucrative e-commerce market.
The Telegraph India reported Thursday that both Flipkart, which is India's largest online retailer of books, and Letsbuy did not disclose the exact sum, but the cash and equity deal is estimated to be between US$20 million and US$25 million. The 350 Letsbuy employees will continue operating under its current management after the acquisition is completed, it added.
"This acquisition fits into our strategy of building dominant shares in all categories we operate in. We are already leaders in the books and media verticals," Flipkart's co-founder and CEO, Sachin Bansal, said in a statement. "Given that we managed to build a leadership position in consumer electronics since its launch in early 2011 as well, it made sense for us to consolidate when we saw this opportunity."
He added that the deal came at an attractive price and the timing has been ideal, the report said.
The union between Flipkart and Letsbuy comes after U.S. online retail giant Amazon broke into India's booming e-commerce market--estimated to be worth about US$10 billion--with a new site, Junglee.com. ComScore had earlier reported that 3 in 5 Web users in India, the world's second most populous nation, shopped online in November last year.