On the same day Walmart unveiled its majority acquisition of Flipkart, eBay announced it was selling its $1.1 billion minority stake in the Indian e-Commerce giant. While eBay initially sold its Indian operations to Flipkart in April 2017, the company plans to relaunch in India under the eBay India moniker.
With the move, eBay will terminate Flipkart’s license to use the eBay.in brand name.
In reviving its own platform in India, eBay sees the same opportunities that Walmart sees: e-Commerce retail in India is projected to rise from approximately $20 billion in 2017 to $35 billion by 2019, and perhaps reach as high as $73 billion by 2022, according to Forrester.
Up to 23.1% of India’s population will make a digital purchase in 2018, though that percentage will be considerably higher among Internet users (58%), according to eMarketer. The firm expects digital buyer penetration among Internet users in India will grow to 72.9% by 2021.
Unlike its first foray into India, when it focused on sales of domestic products, eBay will rely heavily on cross-border sales — selling imported products to Indian consumers and selling Indian products to foreign markets. This market differs from the business model at Flipkart, which largely focuses on domestic sales.
“We will start by bringing import inventory into India and opening up the world’s markets to Indian merchants,” eBay CEO Devin Wenig said in a tweet.
EBay still has lessons to learn from prior failures in the country. In 2017, the marketplace had to write down a $61 million loss from its prior investment in Snapdeal, another Indian e-Commerce marketplace that faced challenging times amid fierce competition in the market.Snapdeal has in the last year laid off staff, struggled with finances and failed to close an acquisition deal with Flipkart.
The battle for the Indian consumer can’t be discussed without also acknowledging Amazon’s continued role. Amazon already has funneled more than $3 billion into its main Indian subsidiary, according to Indian government data. The latest infusion of nearly $400 million took place in late April.
The e-Commerce giant already has become Flipkart’s chief competitor in India, claiming approximately 31.1% of the country’s online market share compared to 36.9% for Flipkart (and its fashion unit Myntra).
Although competition is brewing in India, it’s not the only country where eBay is seeking a greater presence. The marketplace recently acquired the Qoo10.jp online marketplace platform from Giosis for an undisclosed sum, giving the company access to two million Japanese consumers. Bloomberg valued the deal as high as $700 million.