DNA Money Edit: Snapdeal-ShopClues deal or no deal?

SoftBank-backed online retail platform Snapdeal conducting due diligence for a possible acquisition of competing e-marketplace ShopClues has sent the Indian e-commerce industry in a tizzy. The two e-commerce companies have had good and bad times. Snapdeal claims to have significantly cut down its losses, turning around the business in its 2.0 version. ShopClues hasn't been that fortunate though. From dreaming of a Nasdaq listing in 2017-18, ShopClues has reached a stage where it's not even able to meet a respectable number in terms of executing daily orders on its platform.

The market has been talking about leveraging possible synergies between the two and growing the business beyond the Tier II markets, provided the deal goes through. However, there are major concerns from potential shoppers on these platforms on the authenticity of products being sold on them.

With Amazon and Walmart-backed Flipkart fighting out for a dominant position in the Indian e-commerce industry, it wouldn't take the two players long to establish their dominance in the markets Snapdeal and ShopClues claim to be their strengths. Under such circumstances, how prudent and sensible will this acquisition be for achieving long-term goals is something that's debatable.

While some call the deal 'a new wave of consolidation' in the Indian e-commerce industry, many others wonder if they will really end up in a deal, let alone achieve any benefits of a merger.