According to experts, India’s retail market size will grow to 850 Billion USD by 2020. In 2017, one of the biggest players in the Indian e-commerce market, Amazon, revealed that it had captured only 30% of the total market. That leaves us with a lot of untapped potentials. So, one can only imagine that this gap inspired global e-commerce site, E-Bay, to enter the Indian market once more.
Though E-Bay had dropped a few hints about India operations that can enable Indian vendors to sell in online marketplaces globally, this is the latest development in the matter. According to E-Bay CEO, David Wenig, “[…] the Indian market is still in its early phases. There is plenty of growth left,” When asked about how they plan to enter India with the new FDI regulations set in place for the e-commerce market, he responded saying “There are multiple opportunities; there are other parties that have approached us about potential collaboration. We will see how that goes.”
How will India’s new regulations on e-commerce sites affect it?
There’s a high chance that India’s new regulations on e-commerce sites won’t affect E-bay’s operations at all. This is mainly because E-Bay’s business model has been structured in a way that the company only gains from online transactions and advertising. They also gain revenue from selling listings spaces to sellers. This is quite different from Amazon and Flipkart as they have their own holding companies in retail and wholesale operations, and also have made indirect investments in brands, retailers, and other vendor companies.
India’s new regulation states that e-commerce companies cannot sell products that they have a stake in, thus, should not pose too many problems for E-Bay. In fact, it is these regulations that enable all vendors to compete in a level playing field that has led to E-Bay coming back to India.
Why is E-bay entering the Indian Market after its initial failure?
After entering India in 2004, E-bay was bought out by Flipkart in the year 2017, which then shut down the E-Bay operations in 2018. Flipkart’s licensed ownership of E-bay has since expired. However, while the Indian e-commerce market was deemed too tumultuous for this e-commerce company earlier, events like Walmart acquiring Flipkart for a cool 16 Billion USD indicate that foreign players do not consider the Indian market to be volatile (at least not for e-commerce dealings). Experts believe that E-Bay is only one of the first to enter the Indian market, with more companies set to follow suite soon.
E-Bay had invested 61 million USD in Snapdeal in 2018, following its buy-out from Flipkart. Whether the California-based company has plans for a merger with Snapdeal or wants to have a stake in them as a separate entity remains to be seen for now.
E-Bay’s spokespersons confirmed that they are already setting up a website for the Indian market wherein customers can import items from the US. Their next step is to enable domestic selling and buying on the website before launching it.