Manifest Merger error - tools:replace not working

In my case,

removing tools:ignore from the Manifest files and adding tools:replace="allowBackup,supportsRtl" worked for me.

Update:

One more solution looks promising, however I never tried it.

 <application
    xmlns:tools="http://schemas.android.com/tools"  <-- added tools on application tag
    android:name=".ABC"
    android:allowBackup="false"
    android:fullBackupContent="false"
    android:hardwareAccelerated="true"
    android:icon="@mipmap/ic_launcher"
    android:label="@string/app_name"
    android:supportsRtl="false"
    android:theme="@style/Theme"
    tools:replace="allowBackup,supportsRtl"
    tools:ignore="GoogleAppIndexingWarning,UnusedAttribute">

As I know, we can't use both tools:replace and tools:ignore. So you might remove one from your AndroidManifest.xml declaration.