India’s largest eCommerce retailer, Flipkart Ltd has been having initial talks with the ticketing platform “BookmyShow” with an aim to purchase a large minority stake. They have initiated this deal with an intention to provide the transaction offerings and services against existing competitors like PayTM. Flipkart’s major share holder Tiger Global has shown interest in the ticketing platform BookMyShow and hence would go ahead with purchase of a minority stake of the latter.
Customer Retention is the Goal
The online retailer wishes to buy shares from existing investors of BookMyShow which is owned by Bigtree Entertainment Private ltd. apart from investing fresh capital in the company. Flipkart aims to enhance customer experience by adding more services to its existing business through it’s investment in BookMyShow. Building a strong partnership by investing in the the marketing leader in ticketing services, Flipkart is trying to retain customers fore more time on its website through such value added services. If the deal gets through, Flipkart will give a tough competition to existing online entertainment services such as Hotstar, Netflix, Amazon Prime video and other ticketing services.
Also, If the proposed deal gets materialized, BookMyShow might be valued at around $500 million to $700 million based on the views of market analysts. There is no clear indication of how much amount Flipkart plans to invest in this deal. BookMyShow has raised around 500 Crore rupees from Stripes Group, Network was initially hoping to acquire BookMyShow, but due to some concerns from existing business owners, they decide to go for a stake purchase rather than acquisition. Reliance industries-owned Network 18 has the biggest stake in BookMShow and holds 39% of the shares and they are very bullish about the latter’s growth.
Flipkart along with it’s existing payment services PhonePe and the new addition of ticketing services by partnering with BookMyShow will give a strong competition to Paytm’s business. The next step they are aiming for is to add On-demand Video services similar to NetFlix and Amazon Prime Video so that they can get improve customer retention. Both eCommerce giants Amazon and Flipkart are trying to integrate multiple Value added services to their existing platforms in order to gain a bigger chuck of the customer spending. The eCommerce giants in India are following the footsteps of the Alibaba, the Chinese eCommerce bellwether to increase their service verticals. Alibaba has also recently invested in online to offline services platform Meituan-Dianping along with it’s Payment Services AliPay. Amazon Prime video has allotted an investment of 2000 crore rupees for India alone as it’s developing a lot of original shows along with leading production houses in the country.
BookMyShow is one of the best ticketing platforms in India which caters to urban citizens and is also one among the profitable Internet companies which posted a revenue of Rs. 248 crores and profit of 3.1 crore rupees for the last financial year. On the other hand, Flipkart is also growing and expanding steadily with investments from major shareholders like Softbank group, Tencent Holdings and others.