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11 May, 18
11 May, 18
eBay, Flipkart, Walmart

eBay’s plans to relaunch in India, explained

After Walmart sealed a $16 billion deal with India’s largest e-commerce site Flipkart, eBay decided to sell its stake in Flipkart and is currently planning to relaunch eBay India.

By Elton Gomes

eBay confirmed that it had terminated its strategic deal with Flipkart. Credit: Flickr

By Elton Gomes

Following Walmart’s $16 billion deal with India’s largest e-commerce site Flipkart, eBay has announced its decision to sell its stake in Flipkart in an official statement released Tuesday. The company has not provided any additional details but added they will be relaunching eBay India and will focus on cross-border trade in the initial stages.

In the official statement announcing the move the company said, “eBay has notified Flipkart and Walmart that it intends to sell its holdings in Flipkart, which will represent gross proceeds of approximately $1.1 billion.” The online marketplace went on to say that it plans “to relaunch eBay India with a differentiated offer to focus initially on the cross-border trade opportunity, which we believe is significant.”

Here’s what happened

In 2017, eBay sold its India business to Flipkart and purchased a minority stake in the e-commerce company. As part of the deal, Flipkart was licensed to use eBay.in for its products. Additionally, both companies could cross-promote their products between both platforms.

In other words, Flipkart’s vendors had access to eBay’s global customers, while Flipkart’s customers gained access to eBay’s global inventory of products. eBay also signed a four-year exclusive commercial arrangement with Flipkart. However, the arrangement is likely to get dissolved due to Walmart’s deal with Flipkart.

eBay entered the Indian market very early in 2004 – way before the existence of any e-commerce site in the country. However, eBay failed to leave an impression, and decided to join Flipkart in 2017. Now that it has severed ties with Flipkart, the company will have to start from scratch to rebuild its presence in India.

Why you should care

The presence of another e-commerce site is definitely good news for the Indian consumer. Considering eBay’s global presence, consumers might be able to find those products on eBay that are not available on local e-commerce platforms.

However, given the cutthroat competition in India’s thriving e-commerce sector and this being eBay’s second foray into the Indian market, the company will have to adopt a stronger and more innovative technology to surge a successful comeback.

Furthermore, in light of the Flipkart-Walmart deal, there are chances that Flipkart might introduce a wider range of products with Walmart’s backing. Thee deal with Walmart has further cemented Flipkart’s influence in the market, and by going at it alone, eBay has an uphill task ahead.


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