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Flipkart Shutters LetsBuy; Why Not Keep Two Storefronts?

LetsBuy, the electronics and gadgets focused ecommerce store, which was acquired by Flipkart, earlier this year, has shut shop and is displaying a redirection message, informing visitors that its operations have now been integrated with Flipkart – ‘the largest player in the category’, and that existing orders are secure. It also lists a category menu linking to respective catalogues on Flipkart.

The move was rather expected with a spate of rumours doing the round, in addition to a recent report by Businessworld which cited Employees, suppliers and logistics partners of Letsbuy.com saying that the brand will be killed following the shutdown of some of LetsBuy’s warehouses, and another one by Pluggd.in which suggested that orders on LetsBuy would pass through Flipkart’s ‘selection & checkout process’. The report had also suggested a partial lay-off.

At the time of writing this post, we observed that Flipkart has indeed integrated some of LetsBuy’s products into its own catalogue. For example, we found that there were more products in some of the categories under ‘Computers’.

Why Not Keep Two Store-fronts?

When Flipkart acquired LetsBuy in February, it had said that the founders of Letsbuy along with their 350+ team will continue to function independently, but will be able to access Flipkart’s technology platform and supply chain capabilities. We wonder why Flipkart could not let LetsBuy operate as an independent brand, specially when it was getting reasonable, albeit reduced traffic (the Businessworld report mentions 1,48,501 daily uniques citing Hypestat) and had established itself as a discount destination with better recall value than some of the other players in the segment.

Flipkart could have leveraged on the price differentiation and positioned LetsBuy as a discounted goods site, while maintaining a common cart and checkout process and integrating logistics and warehousing to cut down costs.

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Otherwise, if not for its userbase, brand, and relationships with vendors, why did Flipkart acquire LetsBuy?

(Updates: We meant to say that LetsBuy could have been used for ‘discounted goods’, not for discounts and deals like in case of couponing. The post has been updated to correctly reflect that)

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