If Flipkart and Snapdeal merge, these are the vital statistics that will matter

India’s online retail segment is in consolidation mode.

On April 10, Flipkart said it acquired eBay in India. There are also rumours of a merger between Flipkart and Snapdeal, pushed for by Japan’s Softbank, which holds a 35% stake in the latter’s parent company Jasper Infotech. The deal could be a win-win for both the Indian retailers. For one, Flipkart would get the much-needed firepower to tackle the American giant Amazon which is firming up its India play. For Snapdeal, Flipkart could be the saviour it needs at a time when funding is drying up and it is badly losing money.

If merged, here’s how the combined entity would stand:

Losses

India’s online sellers have been bleeding due to huge marketing expenses and aggressive discounts. Neither Flipkart nor Snapdeal have ever registered profits, even though they were founded almost a decade ago. Experts say that a consolidation will cool down the marketing frenzy.

“While the market will likely remain intensely competitive, we believe the promotional intensity, which resulted in negative gross margins in the past, could decline as the market rationalises,” analysts at SunTrust Robinson Humphrey, the Atlanta-based investment bank, wrote in an April 10 note on Flipkart’s acquisition of e-bay India.

Revenues

For a long time, the much-hyped metric gross merchandise value was confused with revenues when it came to e-commerce. The firms, too, promoted this metric during their early growth years (2013-2015). The GMV is calculated as “sale price charged per item X number of items sold.” Revenue is only the small commission that these companies earn on the sale of each item through their platform.

For instance, Flipkart reported a GMV of $4 billion (Rs 25,858 crore) in 2014-’15. But as the following chart shows, it reported an operational revenue of some Rs9,352 crore. Similarly Snapdeal co-founder and CEO Kunal Bahl said in August 2015 that his firm had hit the $4-billion GMV mark. Revenues were merely a fraction of that figure.

Of late, e-tailers have realised that the GMV won’t help them sustain in the long run. So they have discarded this metric. A Flipkart-Snapdeal merger will now combine their revenues, though Snapdeal has been trailing the former for years in this metric.

Market share

India offers a massive opportunity for online retail. The market is currently valued at Rs 1.44 lakh crore, according to market research firm Euromonitor. It is still nascent and will grow over 40% each year, the SunTrust Robinson Humphrey report said. By 2020, some 550 million Indian cellphone users would use high-speed mobile internet, and the size of the internet economy (including online retail) is estimated to double to $250 billion, a report by the Boston Consulting Group and The Indus Entrepreneurs says.

However, not all estimates look rosy. Growth forecasts have been cut as analysts worry over a slowdown in the increase in the number of buyers, drying up of funding, and government restrictions on e-commerce. American research firm Forrester, earlier this year, cut its 2020 forecast for Indian online retail’s market size by 36% to $48 billion.

Now, that doesn’t bode well for the merger as the firms and investors are betting on a steady rise in the number of consumers.

Funding

Amid concerns of a funding crunch, Flipkart has managed to fetch $1.4 billion in a single round. This is the second time it has raised a billion dollars. Compared to Flipkart, Snapdeal is on weaker ground. The latter is reportedly struggling to manage its limited cash reserves. If the merger happens, Flipkart’s robust finances will make up for Snapdeal’s cash crunch.

Popularity

While there are no exact estimates of the number of registered users Flipkart and Snapdeal have – the companies self-report intermittently – their popularity can be gauged from their mobile apps. Flipkart has way more downloads than Snapdeal, as the table shows, according to data provided by App Annie, an analytics firm. Additionally Myntra and Jabong are also parts of Flipkart. The app with the highest downloads as of 2016 was Amazon at 32.2 million. This metric is important for both Flipkart and Snapdeal as they increasingly tap mobile-only customers.

This article first appeared on Quartz.