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Snapdeal buys into m-commerce

News, 10 April 2015

NEW DELHI: Snapdeal, which is vying with Flipkart and Amazon to be the leading ecommerce player in India, has added mobile transactions company FreeCharge to its growing portfolio of services.

In a deal estimated to be worth over Rs 2,400 crore ($400m), it means the Delhi-based ecommerce giant can gain access to FreeCharge's valuable data and its younger customer base, The Times of India reported.

FreeCharge is popular with younger consumers – most of its customers are aged 18 to 25 – because it rewards users with coupons when they top up their mobile phone credit and other transactions.

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On top of that, the platform has an estimated 10m users and an increasing number of Indian consumers are carrying out transactions on mobile devices.

FreeCharge will continue to operate independently, but Snapdeal said the two companies will collaborate to offer "a seamless shopping experience" to customers across both platforms and that its user base will grow to over 40m people.

"This is one of the biggest acquisitions in the history of the internet industry in India and sets up Snapdeal to build the most impactful digital commerce ecosystem in India," Snapdeal said in a statement.

This is the fifth acquisition Snapdeal has carried out in just the past year, having taken over a host of ecommerce sites ranging from fashion to finance, and CEO and co-founder Kunal Bahl has signalled the company's aim to win more custom.

"We want to target the new tsunami of users who are going to come on to the internet," he said, in comments reported by the Economic Times.

Remarking on what the deal means for ecommerce in India, Sanjay Swamy, a managing partner at investment group AngelPrime, told the Financial Times that "mobile commerce is everything" in the country.

"Ecommerce is just going to be subsumed by mobile, and so it makes sense that companies like Snapdeal are buying others who have plenty of mobile customers," he said.

Data sourced from Times of India, Financial Times, Economic Times; additional content by Warc staff