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The Deal between Snapdeal and Freecharge – A Strategic Choice or Mere Coincidence!

ET Cases, 12 Pages
AUTHOR(S) : Mr. Amit Tripathy- Research Scholar, Dr. N. M. Leepsa- Assistant Professor - National Institute of Technology, Rourkela

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The Deal between Snapdeal and Freecharge – A Strategic Choice or Mere Coincidence!


“Scale is important for a start-up. Think big, but take one day at a time.”1

– Kunal Bahl, Founder and CEO, Snapdeal

In April 2015, Snapdeal acquired Freecharge, a leading m-commerce online recharge platform, for an estimated $400 million (INR2,400 crores2). The transaction was 30% in cash and 70% in stock at a $5 billion valuation for Snapdeal.3 According to Kunal Bahl, co-founder and CEO, Snapdeal, this acquisition would create India’s largest m-commerce portal with mutual customers of Snapdeal and Freecharge. He also claimed that, with this acquisition they have the largest market share and were the largest m-commerce company in India.4 Flipkart’s acquisition of Myntra in May 2014 was by far the biggest deal for about $330 million5. However, Snapdeal surpassed it with its acquisition of Freecharge and made it the largest deal in the Indian E-commerce digital space, following which many start-ups crowding the Indian E-commerce space caught up with the trend of acquisitions for expansion and fund raising. The entire process faced few hurdles at the beginning but after the investors of Freecharge agreed, the deal was soon signed and carried on smoothly...................


Exhibit I: Market Size of E-commerce Industry in India

Exhibit II: Distribution of Products Queries in E-commerce

Exhibit III: Notable Acquisitions in E-commerce in India

Exhibit IV: Comparision Table of Snapdeal and Free Recharge

Exhibit V: Snapdeal’s Honours and Awards

Exhibit VI: Total Funding Received by Snapdeal

Exhibit VII: Acquisitions of Flipkart and Snapdeal in 2015-2016

Exhibit VIII: Market Share of E-commerce Players

Exhibit IX: GMV of Snapdeal and Flipkart

 1 Madanmohan Rao, “‘Technology democratises entrepreneurship’ – 20 quotes from the Times LitFest 2015!”,, February 2nd 2015 (accessed date: September 12th 2016)
2 A crore ( ; abbreviated cr) denotes ten million (10,000,000 or 107 in scientific notation) and is equal to 100 lakh in the Indian numbering system. It is widely used in South Asia, and is written in this region as 1,00,00,000 with the local style of digit group separators (a lakh is equal to one hundred thousand and is written as 1,00,000. Large amounts of money in India are often written in terms of crores. (Source: “Crore”,, May 5th 2016 (accessed date: March 23rd
3 “Snapdeal buys Freecharge for $400m”,, April 9th 2015 (accessed date: September 12th 2016)
4 James Crabtree and David Keohane, “India’s Snapdeal buys mobile payments platformFreecharge.”,, April 8th 2015 (accessed date: February 26th 2017)
5 Mihir Dalal and Shrutika Verma, “How Flipkart sealed the deal with Myntra”,, May 23rd 2014 (accessed date: February
26th 2017)

Teaching Note Preview

The Deal between Snapdeal and Freecharge – A Strategic Choice or Mere Coincidence!



The case focuses on the decision of Snapdeal to acquire Freecharge in 2015. It introduces the participants to the trends in E-commerce sector in India and the companies’ positions in the industry. This was not the first acquisition of Snapdeal or any other E-commerce player in the country but certainly was the biggest acquisition so far. Realising the challenges ahead, Snapdeal went on with this acquisition to turn the wheels in its favour against the E-commerce giants Flipkart and Amazon.

Prerequisite Conceptual Understanding (PCU)/Before the Classroom Discussion

The participants should be aware of the competitive strategies adopted by firms for expansion of business. They must have an understanding of Michael Porter’s Five Forces Model and should be prepared with the porter’s model for Snapdeal. For a better analysis of the case, students could be asked to visit the websites of Snapdeal and Flipkart to analyze how they were positioned in terms of customer satisfaction and reviews, user-friendliness, the range of products available, etc.

Case Positioning and Setting

This case study can be used in the MBA program for discussing:

• Corporate Restructuring - Mergers & Acquisitions
• Strategy Courses - Expansion Strategy, Mergers & Acquisitions, and Michael Porter’s Five Forces Model

Assignment Questions

I. Do you support Snapdeal’s proposal to acquire Freecharge? Why?
II. What is the role played by investors in this deal?


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Product code: STG-1-0050, STG-1-0050A


This case study on the deal between Snapdeal and Freecharge enables students to understand whether the decision of the deal was a planned or unplanned strategy – by comparing the anticipated and actual synergy derived from the deal. This case study focuses on two key parts of a strategic corporate restructuring, i.e., the modelling of a firm’s marketing strategy and the outcome of the strategy on firm’s synergy. Snapdeal is India’s largest online marketplace, competing with two other giants in E-commerce market Amazon and Flipkart. The company was co-founded in 2010 by Kunal Bahl and Rohit Bansal. Starting as just an online shopping marketplace, it soon expanded to become the India’s second largest online marketplace after Flipkart1. Today, Snapdeal offers an agglomerate of 10 million and more products across diverse categories, with a brand base of 25 million customers and 150,000 sellers. Headquartered in New Delhi, it has its presence in more than 6,000 towns and cities. With its acquisition of FreeCharge, India’s fastest growing and leading mobile E-commerce platform, in April 2015, Snapdeal had become the largest mobile commerce firm2. Why did Snapdeal chose Freecharge? What were the challenges and opportunities for Snapdeal (internet shopping) to buy Freecharge (internet mobile recharging)? How did Snapdeal’s strategy affect its competitors and what were the competitors’ actions and reactions in post deal situation? Would Snapdeal be able to reap enough benefits to compete with its rivals in the long-run by adopting this vertical integration strategy?

Pedagogical Objectives

  • To understand and analyze the current business dynamics of E-commerce industry in India
  • To study the growth strategy of the market leaders in E-retailing sector with discussion on the strategies adopted by Snapdeal
  • To examine Snapdeal’s competitive strategy through Michael Porter’s Five Force Model
  • To inspect, how Snapdeal’s competitors respond to the deal between Snapdeal and FreeCharge

Case Positioning and Setting
This case study can be used in MBA Program/Executive MBA/BBA –

  • Corporate Restructuring Course – Mergers & Acquisitions
  • Strategic Management Course – Expansion Strategy, Mergers & Acquisitions, and Michael Porter’s Five Forces Model

1 “Case Study: How Snapdeal went on to become India’s top online marketplace from just another coupon website?”,, August31st 2015 (accesed date: February 26th 2017)
2 A. Raghunathan, “Indian Online Marketplace Snapdeal Becomes Largest M-Commerce Player In The Country”,, April 9th 2015 (accesed date: February 26th 2017)

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