Signs of consolidation in India’s startup-laden ecommerce segment have begun showing up with reports of eBay planning to merge its Indian unit with Flipkart. If the talks go through, eBay India will be the biggest beneficiary.
Currently, eBay India is realigning its platform for increasing operational efficiencies between buyers and sellers. Flipkart, one of the largest ecommerce players, understands the nitty-gritties of the Indian market and eBay India can take a leaf or two out of Flipkart’s expertise in cracking the Indian market.
Despite its foray more than a decade ago, eBay India has failed to gain the online shopper’s confidence and lost share to the likes of Flipkart, Amazon, Snapdeal and Paytm. It never found a firm footing in India.
The proposed Flipkart-eBay combine has to battle the might of Amazon which has lined up a USD 5 billion investment for India. Even Chinese gaint Alibaba and Japan’s Rakuten are waiting in the wings to dig in into India’s ecommerce pie. Though Alibaba has investments in Paytm, it is yet to make a full-fledged entry in the country.
All large e-commerce companies in India including Snapdeal, Amazon, Shopclues, Paytm and Flipkart reported huge losses last year. In a scenario where funding is drying up and business models being in duress, startups are scouting for mergers.
Also Read: Flipkart leads loss tally in 2016 followed by Amazon, Snapdeal
Japan’s SoftBank is leading the potential sale talks of Snapdeal with Flipkart and Paytm, Moneycontrol had earlier. Picture this, a Flipkart+Snapdeal+eBay India combine can be a potent force to reckon with. In the event of a merger, eBay India can bank on Flipkart’s strong footing in southern and western markets of the country, Snapdeal’s reach in North India.
Goldman Sachs pegs the Indian ecommerce market at USD 228 billion by 2030 while Amazon has in the past said that it views a trillion-dollar opportunity in India.
The merger with Flipkart can help eBay India cash in on this opportunity before Amazon and other global majors.
On a lighter note, the landscape of India's ecommerce industry is filled with opportunities, glory, risks and rewards. In that, it reminds us of the epic Game of Thrones TV series, where characters pit their wits, bravery and shrewdness to climb up the ladder.
If #ecommerce is #Westeros, these are the major players. #GameofThrones @Flipkart @amazonIN @snapdeal @AlibabaGroup pic.twitter.com/nWJXZgDsRm— moneycontrol (@moneycontrolcom) July 23, 2016
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