BookMyShow looks for Flipkart's backing to combat Alibaba

A minority stake in BookMyShow to give Flipkart a play in the fast-growing online ticketing space and also an access to a high-spending loyal customer base

Amid competition from deep-pocketed global players like Alibaba, India’s leading online ticketing platform BookMyShow is looking for a backing in its space from Flipkart, the country’s largest internet company.

While Flipkart BookMyShow Deal has been one of the few profitable internet companies in India, with a profit of Rs 3.1 crore on a revenue of Rs 248 crore in the year that ended March 2016, competition from rivals like Paytm has caused sales growth to slow.

To shield itself from cash-burning rivals, BookMyShow will sell a minority stake to Flipkart, a behemoth with a cash reserve of $4 billion. For the e-commerce major, a stake in BookMyShow will give it a play in the fast-growing online ticketing space and also an access to a high-spending loyal customer base.

Also Read : Latest Current Affairs

According to Livemint, which reported the story first on Monday, Flipkart is interested in outright ownership of BookMyShow, but talks have largely steered towards purchase of a minority stake in the company. Both companies have a common investor in Accel Partners, one of the oldest and reputed early-stage VCs in the country.

Flipkart has been an active investor in other internet businesses and its acquisitions like Myntra, Jabong and PhonePe have borne fruit. Myntra says it will become profitable at an earnings before interest, tax, depreciation and amortisation (Ebitda) level by March 2018, while PhonePe says it is the largest digital payments player on UPI.

While Flipkart is looking at categories like groceries to get customers to buy from it more often, the model will take time and significant investments over the next few years. On the other hand, online ticketing, already an established market in India, will give Flipkart the desired repeated purchases on its platform. Read More

Walmart rips up China online strategy, starts again with stake in Alibaba rival

Walmart rips up China online strategy, starts again with stake in Alibaba rival

Walmart Stores Inc has sold its Chinese online grocery store in return for a stake in the country's no. 2 e-commerce firm, ripping up its previous strategy in efforts to cure ailing sales in one of the world's toughest retail markets.

The deal will see the US grocery giant swap its Yihaodian platform for a 5% stake in Inc, worth about $1.5 billion by the firm's latest market value. The move also gives Walmart a ringside seat in bitter rivalry with Chinese e-commerce leader Alibaba Group Holding Ltd.

The sell-off, announced on Monday, is a significant shift for Walmart in China, where it operates more than 400 bricks-and-mortar stores. The firm has been shuttering underperforming outlets and grappling with soft online sales in the world's second-biggest economy since it bought full control of Yihaodian in July last year, saying the site would play a leading role in its China strategy.

"The reality is that e-commerce is hyper-competitive in China and it is tough for any platform to make money," said Ben Cavender, Shanghai-based principal of China Market Research Group. "Selling up in return for a 5% stake in is a good way of staying in the space while reducing the risk."

The deal echoes a strategy adopted by other international retailers and consumer goods makers - selling a local unit for a stake in a Chinese partner in order to prosper in a cut-throat marketplace. France's Danone SA sold its Dumex brand last year to raise its stake in local dairy giant China Mengniu Dairy Co Ltd.

Walmart 's tie-up gives it access to nationwide logistics and warehousing networks, as well as its over 150 million users - helping expand the US firm's reach with China's increasingly tech-savvy middle class.

For the deal could provide a boost in its intensifying competition in the fast-growing online grocery business with Alibaba - a market set to boom to nearly $180 billion by 2020 from $41 billion last year, according to data from food research body IGD. Read More

Flipkart in talks to raise $1 bn to expand business: Report

India's largest e-commerce marketplace Flipkart is said to be in the market to raise as much as $1 billion, but at a valuation lower than its peak of $15.2 billion. The company is looking for investments to expand its business and ward off attacks from well-funded rivals Snapdeal and Amazon. Read More