The rumours of Snapdeal’s sale to China’s Alibaba have been greatly exaggerated.
Over the last year or so, several source-based media reports have said that Alibaba, led by one of China’s richest men, Jack Ma, is in talks to acquire the online retailer.
Last week, when Ma’s close associate, friend, and co-investor, Masayoshi Son, was in India, similar rumours began making the rounds on social media and technology news websites.
It began with two anonymous Twitter handles that often comment on Indian startups.
Alibaba buying out Snapdeal in $2 Bn.
— Unicon Baba (@uni_con1) December 1, 2016
Alibaba Buys out @snapdeal for $ 2 Bn. Rohit & Kunal leaving the company. Deal to be announced once Masa lands on 3rd.
— CorporateKumar (@Corporatekumar_) December 1, 2016
Son, CEO of Japan’s SoftBank, was among Alibaba’s early investors. Both Softbank and Alibaba are investors in Snapdeal.
Meanwhile, on Dec. 01, online news publication FactorDaily added more fuel, reporting that such a deal was in the pipeline. ”Alibaba is close to buying out Snapdeal, setting up a new battlefront with global rival Amazon,” it said, quoting unidentified sources.
But soon after, Reuters published a story denying the development. And so far nothing has happened.
Snapdeal co-founder and CEO Kunal Bahl, too, has refuted all such talk.
Rumour rumour on the wall, which troll did you call
You said sold, they said bought, but whoever listened to you didn’t get diddly squat.
— Kunal Bahl (@1kunalbahl) December 1, 2016
He also hit out at Factor Daily’s report:
And given the person who texted me is a friend, I responded that this news is garbage. Though there wouldn’t be a story then. Oh well :-) https://t.co/2NTMHX079K
— Kunal Bahl (@1kunalbahl) December 2, 2016
Bahl refused to comment for this story. An email sent to Alibaba Group did not get a reply.
“We reported that talks were on between Alibaba and Snapdeal for a potential sale based on our sources who we have reason to trust. If the deal doesn’t pan out, we’ll report that as well,” said Jayadevan PK, managing editor and co-founder of FactorDaily, who had reported the story.
Industry observers, meanwhile, say that such rumours could affect the brand and employees.
“If a particular brand name is termed as a sale candidate time and again, the image of that brand takes a beating as a non-achieving brand,” said branding consultant Harish Bijoor.
Acquisition buzz during good times is helpful as it shows there are many suitors. However, under the stressful conditions that Indian e-commerce is currently going through, such reports could mean bad news, said Sangeeta Gupta, senior vice-president at Indian IT industry body Nasscom.
At Snapdeal’s office in Gurugram, there have been mixed reactions to the reports. While some employees have been resilient, others feel demotivated, said two company officials not wishing to be identified.
“The reports are scary because these are big media outlets that are putting out the stories,” said one of them. “Even though the management tries to communicate with the teams and reassure them, it’s an additional stress on employees who are already working in a stressful environment.”
However, since the acquisition has not happened so far, over time, the impact has faded. “Now some of us feel these headlines are just made to get eyeballs. So it’s just like writing about Deepika Padukone’s cleavage, there’s no substance in the news but it gets you clicks,” the other Snapdeal employee said.
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