eBay Doing Another Reboot in India – Selling Stake in Flipkart
With Walmart confirming today that it has purchased a 77 percent stake in Flipkart for $16 billion, eBay also announced they are changing their strategy for India.
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“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. Following the close of the transaction, we also will be ending our current strategic relationship with Flipkart, which includes unwinding our commercial agreements with Flipkart and terminating Flipkart’s license to use the eBay.in brand.
“We plan to relaunch eBay India with a differentiated offer to focus initially on the cross-border trade opportunity, which we believe is significant. We believe there is huge growth potential for e-commerce in India and significant opportunity for multiple players to succeed in India’s diverse, domestic market.”eBay Announcement
Setback for eBay
In what can only be described as a setback for eBay in India, the company probably saw no point to strengthening a competitor with the deal it had with Flipkart.
With about $1.1 billion in proceeds and receiving back the eBay.in domain and operations, eBay appears to have profited from this deal in the short term.
But it now is forced to do a reboot in India. The company’s short statement doesn’t address any other possible tie-ups, but that would be too soon to work out anyway.
Unfortunately, this is the second time eBay has realized a failure with a collaboration in India. Just earlier in the year, the company had to write off its $61 million investment in India’s Snapdeal.
With eBay CEO Devin Wenig stating earlier in the year that he wants eBay to be one of three top global omnichannel ecommerce platforms, the marketplace will need a find a solution in India.
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Richard is co-founder of eSeller365. He has over 17 years of experience on eBay which includes tens of thousands of sales to buyers in over 100 countries and even has experience with eBay’s VeRO program enforcing intellectual property rights for a former employer. And for about two years Richard sold products on Amazon using Amazon FBA in the US.
To “relax” from the daily business grind, for a few weekends a year, he also works for IMSA as a professional race official.