eBay losses in India over contract breaches higher than overseas

Posted: Thursday, Apr 07, 2005 at 0000 hrs IST
Updated: Thursday, Apr 07, 2005 at 0000 hrs IST

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Kolkata, April 6: eBay India, the 100% subsidiary of the global $3.3 billion online marketplace eBay, is facing more contract violation cases in India compared with the 31 other countries where it operates.

In India, eBay has to suffer a revenue loss of around 5-7% because some sellers who use the eBay website to sell or auction their goods do not pay the required commission to the company. In a developed market like the US, the revenue loss is less than 2%. eBay entered India by acquiring Baazee.com for $50 million in August 2004.

The company recently faced a legal suit when an IIT student posted a classified ad on the eBay site to sell a mobile clip that had pornographic contents.

According to Gautam Thakar, director of category management & marketing, the company is not too worried about the revenue loss now since India is a new market, but it could become a serious issue in the long run. So eBay has decided to strenghten its legal team by recruiting some more law firms to deal with legal issues like buyers’ grievances and high value defaulters.

ONLINE WOES

• eBay faces more contract violation cases in India
• To suffer revenue loss of around 5-7%
• To strenghten legal team to deal with legal issues
• At eBay, most...

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