Snapdeal CEO Kunal Bahl said on Wednesday that the joint entity would create the country's largest mobile commerce platform with over 40 million customers. About half of that comes from ’FreeCharge‘. The Delhi-based company did not disclose the financial terms of the transaction, but sources said the deal is said to be 30% in cash and 70% in stock.
The deal is said to be an ammunition ton battle with rivals in online retail sector. It is said ’Flipkart‘, with which Snapdeal is in severe competition, has 30 million registered users. Flipkart had acquired online clothing firm ’Myntra‘ for over $330 million last year.
Buying the ’FreeCharge’ platform will give Snapdeal access to a younger audience while most of the Snapdeal customers range from 25 to 35 whereas most of FreeCharge customers range from 18 to 25 age group. FreeCharge was started in 2010 and its core strength was mobile phones, it became more popular amongst the youth because of its offers, says Vaikundarajan.
Snapdeal’s Kunal Bahl said its motive is to add different related offerings around its core platform. He also added it’s just like what the Chinese e-commerce platform Alibaba has been doing. “Moreover, Snapdeal is backed by Japanese telecom and internet major SoftBank Corp, which is also a major stakeholder in Alibaba.” shares Vaikundarajan.
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