BusinessE-Commerce

Amazon and Flipkart to buy a stake in Hopscotch as the new FDI policy continues to hurt

Amazon.in Box on a table

Amazon and Flipkart have been working extremely hard to wrap their business around the new FDI policy. The companies are trying to help themselves up with the current policy has hit them at a wrong time. There is a major change in the way e-commerce websites operate in the country and that has hampered all the growth these two giants were making in India. Amazon even incurred $45 billion in losses within a week of this policy going live. That said, even Walmart suffered $5 billion losses because of it.

That said, the companies have been trying hard to make sense in the current scenario. There is no right step forward for them right now. The etailers are trying every way possible. The FDI policy does not allow companies to mandate independent sellers. That said, Amazon already has complied with it have lowered their commission charges so that they could attract more sellers and become a seller-friendly company. Apart from this, the etailers are trying to set up a bag of subsidiaries which might allow them to create a list vendor as they like.

Moving on, the companies are planning to invest a small amount or are going to buy a small stake in Hopscotch. Hopscotch is basically an online platform for parents, where they can buy all kinds of things for kids. It has garnered a lot of attention from investors because of its growth patterns and the way they operate. The company is also trying to bring in investment and they have asked to buy back share from their employees for the same.

Employee Stock Ownership Plan (ESOP) is a plan that benefits the employees. Employees of the company apart from their salary are given a stake in the company. They can liquidate those shares whenever they want and get huge amounts of money. That said, Hopscotch offered to buy back the shares to 100 of their employees out of which 20 of them have sold their stake.

This is pointing towards investments coming in from all around the world. The company has also hired Barclays as its investment banker and are looking to raise anywhere near to $60 million which is about INR 428 crore. It is also going to expand its services and recruit a number of employees.

Rahul Anand and Lisa Kennedy started Hopscotch in 2012 and have come a long way. The fact that Amazon and Flipkart are trying to buy stake tells us about how good the growth has been. That said, the company has around 3 million monthly active users. The revenue of the company also clocks around $70.06 million which is around INR 500 crore.

The company sells products like clothes, shoes, accessories, toys, maternity wear, and many other things. All the products are from international brands which is hard to get in physical stores. This is a one of a kind startup which sells baby-products online. This has a huge market going forward and is attracting a lot of attention from many investors from around the world.

-Unmesh Phule

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