
Udaan, ChrysCapital deals signal rising M&A wave in India retail
The Indian retail landscape is witnessing a significant wave of mergers and acquisitions (M&A) as big firms look to strengthen their market position, expand their offerings, and gain a competitive edge. The recent deals between Udaan and ShopKirana, and ChrysCapital and Theobroma, are prime examples of this trend.
Udaan acquires ShopKirana
E-commerce major Udaan has acquired ShopKirana, a B2B e-commerce platform that connects small retailers and wholesalers with suppliers, in a move aimed at strengthening its presence in the fast-moving consumer goods (FMCG) segment. The acquisition is seen as a strategic play by Udaan to expand its reach in the rural and semi-urban markets, where ShopKirana has a strong presence.
ShopKirana’s platform enables small retailers and wholesalers to order products from suppliers and manage their inventory, logistics, and payments in a seamless manner. With this acquisition, Udaan is expected to leverage ShopKirana’s network and technology to strengthen its own B2B e-commerce platform and expand its offerings in the FMCG space.
ChrysCapital buys 90% of Theobroma
Private equity firm ChrysCapital has acquired a 90% stake in Theobroma, a popular premium bakery brand in India, in a deal valued at over Rs 200 crore. The acquisition marks ChrysCapital’s entry into the bakery market and is seen as a strategic move to tap into the growing demand for premium and artisanal food products in India.
Theobroma, which has over 20 outlets across India, is known for its high-quality pastries, cakes, and chocolates. With ChrysCapital’s backing, the brand is expected to expand its presence in key markets, improve its supply chain and logistics, and invest in marketing and branding initiatives to further enhance its reputation.
What’s driving the M&A wave in Indian retail?
The recent deals between Udaan and ShopKirana, and ChrysCapital and Theobroma, are part of a larger trend of consolidation in the Indian retail and consumer goods sectors. Several factors are driving this trend, including:
- Growth potential: The Indian retail market is expected to grow at a CAGR of over 10% between 2020 and 2025, driven by increasing consumer spending, urbanization, and the rise of e-commerce. Big firms are looking to tap into this growth potential by acquiring niche players with strong market presence and capabilities.
- Competitive advantage: M&A deals allow big firms to gain a competitive edge by acquiring new technologies, talent, and market insights. In the case of Udaan and ShopKirana, the acquisition is expected to strengthen Udaan’s presence in the FMCG segment, while in the case of ChrysCapital and Theobroma, the deal is expected to provide the PE firm with a strong brand in the premium bakery market.
- Cost savings: M&A deals can help firms reduce costs by eliminating duplication of efforts, improving operational efficiencies, and leveraging the combined scale of the two entities.
- Access to new markets: Acquisitions provide big firms with access to new markets, customers, and distribution channels, allowing them to expand their reach and increase their market share.
What’s next for Indian retail M&A?
The recent deals between Udaan and ShopKirana, and ChrysCapital and Theobroma, are likely to be just the beginning of a wave of M&A activity in the Indian retail sector. Several other big firms are expected to follow suit, acquiring niche players to strengthen their market position, expand their offerings, and gain a competitive edge.
Some potential areas for M&A activity in the Indian retail sector include:
- E-commerce platforms: As e-commerce continues to grow in popularity in India, big firms are likely to look for acquisitions that can help them strengthen their online presence and expand their offerings.
- Food and beverage: The Indian food and beverage market is expected to grow at a CAGR of over 15% between 2020 and 2025, driven by increasing consumer spending and changing consumer preferences. Big firms are likely to look for acquisitions in this space to tap into this growth potential.
- Retail analytics and technology: As retailers look to improve their operational efficiencies and enhance their customer experience, big firms are likely to look for acquisitions in the retail analytics and technology space to gain a competitive edge.
Conclusion
The recent deals between Udaan and ShopKirana, and ChrysCapital and Theobroma, signal a rising wave of M&A activity in the Indian retail sector. As big firms look to strengthen their market position, expand their offerings, and gain a competitive edge, we can expect to see more M&A deals in the coming months. Whether you’re a startup looking to be acquired or a big firm looking to make a strategic play, the Indian retail M&A landscape is likely to be an exciting and dynamic space to watch in the years ahead.
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