A lot is being said about the implications of Flipkart raising 1.4 billion and acquiring eBay India. It is indeed one of the most surprising mergers and has the potential of changing India’s ecommerce industry. Whether the change would be in a good way or bad is yet to be seen.
But what does the merger mean for eBay India?
Lost the first-mover advantage
The US-based ecommerce company eBay launched its India business in March 2005. However, it was present in the Indian ecommerce industry through Baazee.com prior to launching eBay.in. Two years later came Flipkart, which was founded in 2007.
eBay had a good lead over other etailers and a competition-free ground (except Indiaplaza) for over 3 years. Yet the company failed to use it to their advantage. It stayed dormant for many years and didn’t quite focus on diversifying & evolving with the changing face of India’s ecommerce industry.
After grappling with losses, the first mover had to make peace with being acquired by home-grown online marketplace Flipkart.
Amarjeet Singh, Partner at KPMG India rightly stated,
“The point is eBay has been in India for long. While Amazon is already been here in a big way and Alibaba might put its might behind Paytm, this strategic alliance would help eBay cut losses and in the process make it a three-player race. They cannot afford to leave India, and this strategic alliance helps.”
Start of a new chapter in India, says eBay to its sellers
In spite of the many problems, quite a few sellers think that eBay was still a better marketplace than Flipkart, Amazon, Snapdeal and others in terms of generating revenue. Therefore, the news about merger must have raised many doubts in sellers’ minds.
To put doubts to rest, eBay India sent a letter to its sellers (shared with IOS). In its email to the vendors, the company wrote how global buyers and Indian sellers would benefit from this partnership.
“It is the start of a new chapter for eBay in India… eBay and Flipkart have also entered into an exclusive agreement in which they will jointly pursue cross-border trade opportunities to make eBay’s global inventory accessible to more India consumers, while eBay’s millions of active buyers globally will have access to more unique Indian inventory provided by Flipkart,” wrote eBay in the email.
The marketplace added further,
“Flipkart has a wonderful business in India, and we are certain this new deal will provide tremendous opportunities for eBay sellers in India to grow both at home and abroad. The deal is expected to close later this year. For now, nothing changes, we are still here to support your business and help you grow on eBay.in.”
From a distance, it does sound like a wonderful opportunity for Indian sellers. The deal would give access to millions of national and international buyers. And who knows, the seller service might improve?
Sellers, what’s your take on this? Do you think eBay was better off on its own or is merger with Flipkart a better setting?