eBay to sell Flipkart holdings and relaunch eBay India

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eBay Inc. has revealed that it will be selling its holdings in Indian marketplace Flipkart and relaunching eBay India with a cross-border focus.

eBay has informed Flipkart and Walmart that it will be selling its Flipkart holdings in the light of Walmart’s proposed acquisition which we wrote about here. Walmart saw off a rival bid from Amazon but may have difficulty closing the deal when faced with competition rules in India.

eBay say selling its share in Flipkart should raise gross proceeds of approximately $1.1 billion. Once the sale is completed, eBay will also be terminating the strategic relationship with Flipkart established only last year. Under the terms of that deal eBay India was absorbed into Flipkart. All existing commercial arrangements between eBay and Flipkart will also end with the sale, including Flipkart’s licence to use the eBay.in brand.

eBay Inc. made the announcement today on their corporate blog. As they say:

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 Inc.

eBay’s involvement with Flipkart was one of the problems with a possible Flipkart acquisition by Amazon. And it looks like eBay doesn’t want to be involved with a Walmart owned company in India. eBay and Flipkart’s arrangement was an interesting and innovative way to approach the problem of US companies getting its share of online retail in India, but now it looks like it will return to a more traditional model and offer something much like Amazon. The three US companies now look likely to fight it out ever more strongly in what is already a competitive arena.

When eBay talk about the cross-border opportunity it seems likely that they mean harnessing Indian sellers trading with shoppers elsewhere in the world, but we will see exactly what they have in mind in due course.

Update to include Devin Wenig, eBay CEO’s tweet on the subject:

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