When one of the world’s largest online retailers Yoox Net-a-Porter (YNAP) Group joins hands with a global bricks-and-mortar behemoth Alabbar Enterprises, led by business tycoon Mohamed Alabbar, one can almost feel the changing tide. No wonder mergers and acquisition (M&A) and IPO activities within the e-commerce space are witnessing annual increases every year.
The last few months of 2016, in particular, brought some big M&A related news in the e-commerce space – the Walmart acquisition of Jet.com in the US – Jet.com in turn acquired online footwear, clothing and accessories retailer ShoeBuy; Canadian retail business group Hudson’s Bay Company’s acquisition of the Gilt Groupe; and Indian e-commerce company Flipkart’s acquisition of online fashion and lifestyle businesses Myntra followed by Jabong.
Closer home, Amazon and Flipkart’s, reported, talks around stake in the Middle East e-commerce giant Souq.com that possibly didn’t go ahead owing to disagreements over valuation. More recently, Souq.com has, reportedly, attracted Majid Al Futtaim’s interest. On the sidelines of the recently concluded World Economic Forum in Davos, Switzerland, CEO Alain Bejjani stressed on the importance of digital trading for the retail conglomerate, while also expressing omnichannel as the way ahead. He was, however, tight lipped on any possible collaboration with Souq.com.
Add to these, the impending launch of the regional online marketplace Noon.com – featuring over 20 million products with same-day delivery option – anticipated to heat up competition further. When a successful and seasoned entrepreneur like Alabbar – behind the fame of The Dubai Mall alongside several retail businesses – invests in e-commerce it surely indicates growth potential. So much so that today most regional retailers are seeking to be a part of this growth story.
Rupkatha Bhowmick talks to regional e-commerce players to understand their perspectives on how M&A activities will impact the regional online retail industry.
Read the full article in the February 2017 edition of RetailME