EBay pulls out of Flipkart, looks to relaunch eBay India instead
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EBay pulls out of Flipkart, looks to relaunch eBay India instead

Earlier this month, online auction veteran eBay decided to pull out of Flipkart. Flipkart, an Indian online retailer, had been the former company’s way in to the country. Ebay had sold its operations in the country to Flipkart, and taken a minority stake in the company. Now, as part of a $1.1 billion deal, eBay will unwind its commercial agreements with Flipkart and take back the use of its brand in India.

Why? It doesn’t like the idea of Walmart owning a majority stake in Flipkart – which it will, after the close of a $16 billion deal.

EBay’s share price has risen by 11% over the past 12 months

graph 2205 ebay

SOURCE: Yahoo Finance

EBay’s CEO Devin Wenig Tweeted the news that eBay India will begin with a focus on cross-border trade. CNBC cites him as saying that the company will bring “imported inventory to India” opening up the world’s market to Indian merchants.

In a statement, the company confirmed this strategy: "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." The Indian Ecommerce market is heating up, with players like Amazon and Alibaba keen to make in-roads into the country. EBay will have its work cut out establishing a niche – but keeping control of its own brand is an intelligent step in the right direction.

Disclosure

Dominion holds eBay in its Global Trends Ecommerce Fund.


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