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Snapdeal to acquire GoJavas to tackle Amazons market threat

Snapdeal, the former number 2 E-commerce company in India, which consistently lost its market share to Amazon and is being pushed to third place, is looking to turn around its fortune. If sources are to be believed, the company is planning to buy GoJavas to strengthen its delivery chain and to provide faster delivery to its customers to gain more market share. The company’s CEO has not responded to the query but in an earlier interview with ET, Rohit Bansal, COO, Snapdeal had told that the company had reserved $300 million to strengthen its supply chain.

The prospect also looks more possible after GoJavas was given a notice by Jabong which is among its primary customers. After termination form Jabong, the company will be serving Snapdeal and a few others. Snapdeal already has a notable minority share in the company which it bought for 250 crores last year. Snapdeal is expected to complete this transaction through Vulcan, its end to end delivery provider which manages its bulk orders and also its delivery centres. GoJavas is struggling to raise a fresh capital form investors and acquisition by Snapdeal will be beneficial for the both the companies as working with GoJavas hs increased the efficiency of Snapdeal.

GoJavas has recently marked up its prices after which Jabong has put it on notice period and their relationship is not expected to last beyond one month. Snapdeal and Jabong together made up to 85% of GoJavas orders. The company was started as the logistics arm of Jabong but became independent in 2013. Acquiring Gojavas will certainly help Snapdeal battle Amazon which has become the second E-commerce company by orders shipped beating Snapdeal.

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