Snapdeal, a daily deal and e-commerce venture, has bought Esportsbuy.com, an online retailer of sports and fitness equipment, apparel, footwear and accessories, reports the Economic Times, with a confirmation of the development from Snapdeal founder Kunal Bahl. Esportsbuy was founded by two IIT Delhi graduates Prateek Agarwal and Amit Monga. It delivers free across the country, and has cash on delivery.
Esportsbuy offers sports and fitness equipment at a discount, and delivers across the country. It has accessories for Tennis, Cricket and Golf, Sports shoes for multiple sports, apart from Bodybuilding supplements, and equipment for sports and fitness. There are other specialized sports retailers online in India, like Playgroundonline. Strange that Homeshop18 apparently still doesn’t retail sports equipment online, and neither does Flipkart, though Flipkart has acquired Letsbuy, which does (here). Naaptol(here) and Jabong (here) also sell sports equipment online, and the Esportsbuy buy will add a new category to Snapdeal’s offerings.
This is Snapdeal’s second acquisition, after it acquired group buying site Grabbon back in 2010. The amount paid for the acquisition has not been disclosed, but ET quotes sources as saying that Snapdeal paid Rs 50-75 crore for the acquisition, which is around $10-15 million. On revenues of Rs 10 crore – assuming this is gross revenue which ET mentions – that appears to be rather high. Snapdeal has something of a warchest for expanding beyond its daily deals business – it had raised $40 million from Bessemer, NVP & IndoUS Venture Partners in July last year.
We’re expecting more such acquisitions in this fiscal, as the e-commerce space in India goes through consolidation. Over the past year, costs and valuations have been inordinately high for e-commerce firms and the firms have been operating at significant losses, looking to build sales even at significant losses. Customer traction has built up, but when you’re competing primarily on price, then there really is no winner except the customer.