At a time when retail firms are urging the government to open up the e-commerce space to foreign investors, eBay India?s managing director Latif Nathani says that the present norms for foreign direct investment (FDI) in the multi-brand retail space are not impacting the company?s business. In fact, Nathani, who took charge as MD of eBay India three months ago tells FE?s Kirtika Suneja that even after the online retail space is opened up, eBay?s business model will not change. Excerpts:
E-commerce companies have been urging the government to allow FDI in online retail. Your comments.
India has been vibrant in the e-commerce space and we have been present here for nine years. Our model is a marketplace model where no inventory is involved and hence, the present FDI limitations do not impact us. We have 45,000 sellers as part of the eBay India community, of which 30,000 are domestic sellers who have been asking for easing the restrictions when goods are transported across states, besides simplification of customs duty-related paperwork.
How will the opening up of the space impact eBay?s business in India?
Our model will not change with FDI in the sector. There is healthy and aggressive competition in India from both the domestic and global firms and we believe in giving good deals to our customers here.
What kind of investments have you planned for India in terms of infrastructure and headcount?
There are many exciting things about the Indian e-commerce industry as it is at a very nascent stage and the opportunity for retail exports is huge. Every 10 seconds, some buyer in the world buys something from eBay?s India platform. We have 15,000 sellers who are into retail exports and 30,000 catering to the domestic market. We have more than 5 million registered users here across 4,306 cities and two global development centres in Bangalore and Chennai, where we develop products for all markets. We are hiring all the time. Our investment plans for India are very solid and we are looking at both organic and inorganic growth.
What kind of demand are you seeing from tier 2 and 3 cities?
People in tier 2 and 3 towns have similar aspirations as those living in big cities. Though organised retail is not present there, 50% of the transactions across all categories of apparel, electronics and lifestyle take place from these smaller towns and cities.
How has the e-commerce space grown, especially in the current economic scenario?
The slowdown has less impact on e-commerce as we are able to benefit because of price leadership. However, pricing is not the only reason. E-commerce has grown almost 60% in the last one year because online gives you more variety from the available selection. Besides, it spares the time taken to go to a real store, which has its own limitations. The government should grant exporter status to its retailers selling their products abroad, so that they can avail the benefits and facilities given to domestic exporters like fiscal benefits, cheap credit and less paper work.