Gurugram-based e-commerce firm ShopClues will merge with eBay-backed Qoo10, which runs online marketplaces in Indonesia, Malaysia, China, Singapore, and Hong Kong. The all-stock deal is part of Singapore-based Qoo10’s strategy to expand into more Asian countries.

ShopClues, which was facing a cash crunch and was in talks with Snapdeal for a buyout, according to media reports, had laid off some of its employees earlier this year.

The merger has been approved by the board of directors and major shareholders of both companies, ShopClues said in a statement on Thursday. “This partnership presents new strategic opportunities for both companies, as it opens up cross-border opportunities for consumers and sellers across Asia,” ShopClues said.

According to a report by Forrester—The State Of The Online Retail Market In India In 2019—ShopClues owns about 1.6% share of the market in the country. The report says smaller online retailers like Snapdeal, ShopClues, and Paytm Mall are finding it difficult to retain customers and increase the average ticket size.

It says Snapdeal and ShopClues are focussing on the low-price category to create a niche for themselves in the market. "[With] the acquisition of Flipkart by Walmart and Amazon’s focus on shifting beyond metropolitan areas and tier 2 cities, these players will find it difficult to grow in 2019, as well as to raise funds to subsidise the growth (and discounting)," according to Forrester.

ShopClues, which is focussed on tier 2, tier 3, tier 4 and cities beyond that, says it has more than 700,000 merchants registered on its platform. The company delivers to more than 31,500 pin codes across the country. Founded in 2011, ShopClues also operates enterprise services Smartship and Momoe, and social commerce platform Ezonow.

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