Robemall Apparels Pvt. Ltd, which runs private label fashion portal Zovi.com, has successfully culminated a merger with apparel and accessories e-tailer Inkfruit.com run by Fingerprints Fashions Pvt. Ltd.
Justifying the merger, as a way to strengthen ones position in the market, Manish Chopra, CEO, Zovi.com said, “The rationale behind the merger was to have a stronger foothold in the private label offering. Both Kashyap Dalal and Navneet Rai, co-founders of Inkfruit, will join the board at Zovi.”
While we may term it as merger, the fact that Inkfruit will cease to function as an independent portal, is a clear indicator that this has been a buyout. Zovi, will however retain Inkfruit’s brand & merchandise. These will be merely absorbed within the inventory of Zovi & sold as Inkfruit branded apparel on Zovi.com.
Looking at the merger or buyout, it is not immediately clear as to why Inkfruit accepted a buyout. Sharing a common investor SAIF Partners, Inkfruit had managed to land some decent funding numbers. In fact, exactly a year ago in January 2011, SAIF had put in US$ 3 Million just at the time when it had invested US$ 5 Million in Zovi. However, Zovi seems to have surged ahead in the funding race scoring another US$ 10 Million from SAIF and Tiger Global within the same year.
Perhaps, as explained by Chopra, the present scenario of Indian e-commerce is a very competitive one. Multiple ventures are trying to offer similar merchandise & few, in an attempt to garner customers are offering crazy discounts & joining-bonuses. In such a situation, it should make sense that two apparel portals merge their forces & fight united to capture market share & reign instead of eating into each others customers & eventually profits.
As we have witnessed earlier money power does decide who stays & who goes and such mergers & acquisitions are a routine norm now. It is interesting to note that Zovi has managed to secure another hefty funding to the tune of US$ 10 Million from earlier investors post this merger. Lets see how Zovi utilizes Inkfruit’s merchandise & its management to gain a stronger foothold.
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