eBay’s profits sinking; drastic counter measures needed

With the rise and rise of Indian marketplaces like Flipkart, Snapdeal and Shopclues, the competition is heating up for established players from overseas like eBay.

eBay seems to be having a particularly tough time of late. The American company entered the Indian online market in 2004, a good three years before Flipkart began its operations. Yet, eBay clocked a ten percent decline in its earnings in 2014-15. The company’s earnings in FY 15 stood at 23%, down from 33% in FY 14.

Rough weather for eBay – buyers and sellers unhappy

eBay has both unhappy customers and sellers on its hands. Customers are complaining about delivery delays, fake listings, and shoddy customer service. Sellers are complaining that they are not getting the required support, and there is delay in remittance. Experts are of the opinion that eBay appears unwilling to adapt to the local market, which is causing its apparent downfall.

Amazon on the other hand is working on the market in India with investments and a pro-customer policy. The US- headquartered company is taking proactive steps to keep up with the local competition. However, eBay has always shown a reluctance to modify its operations to suit the local climate, as it did in China. With the result, Alibaba, China’s leading online marketplace established its ground and took over the market.

Adapt or perish

eBay must modify its strategy if its performance in India is to improve. The company already has set the ball rolling by putting Indian sellers on the global map through its sell abroad program. However, this is insufficient. eBay also needs to modify its approach to its sellers, provide a strong support system, and listen actively to its sellers and buyers. If it focuses on improving its image, hopefully the next FY will give eBay a greater sale percentage.