The $1.4 billion funding of Flipkart, announced today, includes an investment from eBay as well as a merger of eBay India’s business with Flipkart in exchange for equity. This marks an exit of sorts for eBay from India, although eBay.in will continue to function as a part of Flipkart. It also brings the curtain down on a journey that began 13 years ago.
Long before the arrival of Amazon and Alibaba, or even the launch of Flipkart and Snapdeal, it was eBay that made a foray into Indian ecommerce with the acquisition of Bazee for US$50 million in 2004.
Flipkart launched in 2007 and Snapdeal in 2010. Backing from large hedge funds Tiger Global and SoftBank sucked them into a race to grab market share with discounts.
The eBay model, which originally connected buyers and sellers in auctions, got pushed to the periphery with the broader range of categories on Amazon and Flipkart as well as the discounts.
In an effort to remain a significant player in Indian ecommerce, after the entry of Amazon, eBay chose to invest substantially in Snapdeal. But a US$5 billion infusion by Amazon into its Indian arm put paid to that bet.
Too little, too late
Late last year, eBay fired its product and tech team at its development center in Bangalore, in a sign it was winding down its India operations.
eBay has been trying to rethink its ecommerce model to serve small retailers and millennial shoppers, but the Indian market already has three huge players in Flipkart-Snapdeal, Amazon, and Alibaba-Paytm.
Parking eBay.in in Flipkart was the only face-saver left for the first global ecommerce player to set foot in India.
This is an excerpt from the article published on Tech In Asia. You can read the full article here
