Flipkart-Myntra: Merger control between Amazon Threat and short-run effects on the Indian economy

• Ashitha Mary George,  
• Dr. N. KARUNAKARAN*

Abstract

Mergers and Acquisitions have been the most popular means of inorganic expansion of companies over the years. It is extensively used for restructuring business organizations. The growing number of internet users, a more secure and convenient transaction system, coupled with lucrative offers and a 24x7 delivery system are the common drivers of growth. For Indian companies wishing to expand beyond India’s borders, mergers and acquisitions have become a popular method to access new markets rapidly. This study reveals that while the merger intended to enhance Flipkart’s market position through increased resources and synergies, it also led to heightened competition, manifesting in aggressive pricing and improved service offerings. The immediate economic effects include potential job creation and increased investment in technology and infrastructure. Mergers and Acquisitions have been the most popular means of inorganic expansion of companies over the years. It is extensively used for restructuring business organizations. The growing number of internet users, a more secure and convenient transaction system, coupled with lucrative offers and a 24x7 delivery system are the common drivers of growth. For Indian companies wishing to expand beyond India’s borders, mergers and acquisitions have become a popular method to access new markets rapidly. With Flipkart raising $1 billion in fresh funds and Amazon pouring $2 billion into the Indian market, many existing players could fall off the investors' radar paving the way for a race between Amazon and Flipkart in India. The 2014 merger between Flipkart and Myntra marked a significant consolidation in the Indian e-commerce sector, aimed at bolstering Flipkart’s competitive stance against global rival Amazon. This paper explores the regulatory aspects of the merger control process, focusing on how the acquisition sought to mitigate the competitive threat posed by Amazon. It examines the implications of this consolidation for market dynamics, particularly in terms of pricing strategies, consumer benefits, and the broader economic impact in the short run.

Keywords

Mergers and Acquisitions (M&A); Inorganic expansion; Indian companies; competition; infrastructure; e-commerce; economic impact