1. Flipkart buys eBay India, but it will continue operating independently

Flipkart buys eBay India, but it will continue operating independently

Thirteen years since the launch of its India operations, global e-commerce player eBay has decided to sell its Indian operations to Flipkart

By: | Bengaluru | Updated: April 11, 2017 5:47 AM
Under the terms of the deal, Flipkart will own and operate the eBay.in as an independent business upon the close of the transaction. (Source: Reuters)

Thirteen years since the launch of its India operations, global e-commerce player eBay has decided to sell its Indian operations to Flipkart, opening up an opportunity for cross-border transactions between the two. Under the terms of the deal, Flipkart will own and operate the eBay.in as an independent business upon the close of the transaction. eBay will invest $500 million in Flipkart as part of the deal.

Both the players 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 buyers globally will have access to more Indian inventory provided by Flipkart. “The combination of eBay’s position as a leading global e-commerce company and Flipkart’s market stature will allow us to accelerate and maximize the opportunity for both companies in India,” said Devin Wenig, President and CEO of eBay.

Upon the close of the transaction, which is expected later this year, Flipkart will acquire eBay’s buyers in India. eBay will remove the number of active buyers in India from its reporting during the quarter in which the transaction closes. “It bodes well for Indian and global customers, sellers and the wider e-commerce ecosystem. eBay.in has built a strong presence in India over the years and we hope to take it to greater heights as part of the Flipkart group,” said Binny Bansal, group CEO, Flipkart.

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Interestingly, eBay is also one of the earliest investors in Flipkart’s smaller rival Snapdeal. The deal between Flipkart and eBay also reveals the signs of growing consolidation in the Indian e-commerce market.

Redseer Consulting in a note on Monday said that FY17 has been a challenging year for the e-tailing sector, with multiple regulatory challenges and slow demand growth. According to its analysis, industry size in terms of annualised gross GMV for the Q4 FY17 just reached $14.7 billion which was barely 5% higher when compared to $14 billion, a year ago.

Sandy Shen, research director, Gartner, said, “Although India’s e-commerce market is still at an early stage, the market is seeing signs of consolidation as scale is a key success factor in the business.”

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