The Indian e-commerce major Flipkart, which has been proven a prolific acquirer till now — snapping up rivals Myntra, Jabong and eBay — and win the e-commerce business across the category, is shutting down eBay India.
The e-commerce platform will launch a new platform to sell refurbished goods. In an email to employees, Flipkart CEO Kalyan Krishnamurthy announced the development.
With the launch of the new website, the company will stop all customer transactions on eBay.in from August 14, 2018. The company aims to provide a remarkably enhanced experience to its sellers and buyers via the new platform.
Incomprehensible deal
The Bengaluru-based company acquired the Indian entity of auction site in April 2017, when it raised a total of $1.4 billion led by China’s internet giant Tencent, with participation from Microsoft and eBay. As part of the transaction, eBay pumped in $500 million in Flipkart and sold its India business for $200 million to the e-commerce company.
Experts, however, had then raised the challenge of integration between the two platforms, with which it also had an agreement to “jointly pursue cross-border trade opportunities.”
Come May 2018, when Walmart announced the acquisition of Flipkart in $16 billion, eBay made a u-turn. As a result of the deal, it also announced that it will sell its stake in the business for gross proceeds of $1.1 billion.
Besides, it said that it will relaunch the India business. The new business will focus not on domestic sales, but on cross-border sales: selling into India from abroad, and from India to other markets.
It is difficult to assess how eBay will recapture the market with the relaunch of business in India. Despite being the early mover in the country’s Internet commerce, it failed to make any significant dent.
Amidst this, Flipkart’s strategy to invest $200 million to acquire a business (eBay India) and shut it down to restart a similar business on a new platform goes beyond the comprehension.
The development was first reported by ET.
