In what could be a significant development in the e-commerce space, online shopping site Snapdeal is moving closer to acquiring its peer ShopClues in an all-stock deal.

Both the companies have begun due diligence with an exclusivity agreement over the last few days, sources told CNBC-TV18.

The deal is likely to value ShopClues between $200 million and $250 million, said the industry sources, who did not want to be named.

Both the companies share a common investor, Nexus Venture Partners, which could have been a favourable factor for the integration, given that ShopClues has been talking to multiple players in the industry for a potential sale.

Both Snapdeal and ShopClues are smaller players in the ecommerce sector, dwarfed by Flipkart and Amazon. According to Forrester Research, Snapdeal's market share in 2018 stood at only 1.9 percent while ShopClues held 1.6 percent.

For Snapdeal, the deal can help add a customer base, especially in tier 3 and 4 areas where ShopClues has had a focus on.

ShopClues has been struggling to keep its orders up over the past year, and now sees about 40,000 orders per day, while Snapdeal sees about 2 lakh orders per day.

When contacted, Snapdeal refused to comment on the story, while ShopClues said, "We do not comment on market rumours and arbitrary valuation numbers."

"The company has reduced losses from Rs 210 crore in 2017-18 to less than Rs 45 crore in 2018-19 over the past 12 months while maintaining a robust topline. This has been possible only due to a sharp focus on revenue, and new business initiatives such as enterprise business solutions for large and medium-sized retailers, and EZONow for social retailers," added ShopClue.

Snapdeal had held advanced talks with Flipkart for a sale in 2017, but after talks fell through, the company turned around its business to cut down the burn and break even.

Snapdeal, which now sees over 77 million users every month, had nearly 190 million stock keeping units listed by more than 500,000 registered sellers.

First Published:May 21, 2019 8:25 PM IST