News is out that will see eBay India shutting down mid August according to a report in the Times of India. The 14th of August 2018 is the day that Flipkart will pull the plug and they intend to build and launch a new platform for selling 2nd hand goods.
The back story is that eBay threw their lot in with Flipkart in an exclusive cooperation agreement which was intended to see eBay as the cross border partner with Flipkart.
“The combination of eBay’s position as a leading global ecommerce company and Flipkart’s market stature will allow us to accelerate and maximize the opportunity for both companies in India. eBay is committed to winning in India in partnership with Flipkart. Our exclusive global trade partnership will allow eBay and Flipkart to reach even more consumers around the world.”
– Devin Wenig, CEO, eBay in April 2017
With Walmart buddying up with Flipkart that agreement ended up in tatters with eBay announcing that they’d relaunch eBay India and cancel Flipkart’s rights to use the brand. eBay will effectively be back where they were in early 2017, albeit with many of their sellers also now signed up to Flipkart but then most sellers would probably have offered their goods on both platforms anyway.
“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.”
– eBay in May 2018
The problem may be even worse than it appears on the surface as eBay India ran, we believe, on a separate plaform to other eBay sites around the world and there’s no surety that eBay will retain the members currently trading on the platform. If they all have to sign up again then it’s starting a marketplace from scratch and eBay may not have the appetite for that, although India is one of the largest emerging territories in the world so it’s hard to ignore. Will eBay be able to get their servers up and running quickly and how seamlessly can they get a marketplace running again in India remains to be seen.
India has always been a tricky territory to trade into due to their laws requiring a local business to act as the merchant of record. However as a populous country it’s the cross border trade enabling Indian merchants to sell around the world where the real money is currently to be made and this is where eBay have indicated that they will focus with the relaunch.
“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 in May 2018
All the while Amazon are quietly forging ahead in the background and of course Flipkart isn’t going anywhere with Walmart just waiting to get their hands on the Indian marketplace so it’s going to be an interesting battle for the foreseeable future.
