EBay folds Indian operation into local retailer Flipkart

EBay is also investing $500 million in Flipkart for an equity stake

Facing fierce competition from Amazon.com, eBay has sold its Indian operation to local retailer Flipkart, while joining Tencent and Microsoft in investing US$1.4 billion in the Indian company.

In exchange for an equity stake in Flipkart, eBay will make a $500 million cash investment in the local startup to whom it will also sell its eBay India business, the e-commerce giant said in a statement. Flipkart will run the eBay India business as an independent entity upon the close of the transaction.

India’s online retail business has witnessed cut-throat competition, with most of the players engaging in deep discounting and new services to customers, such as the ability to pay in cash when orders are delivered. 

Flipkart has expanded from starting mainly as an online bookstore to selling a variety of other categories of products including consumer electronics. The retailer is also reportedly in talks to acquire SoftBank-backed retailer Snapdeal as it tries to increase its user base to counter Amazon, which said last year it would invest $3 billion in the Indian market.    

The deal with eBay gives Flipkart access to global markets for its Indian products, while giving its Indian customers access to products from eBay. Flipkart and eBay said they will also push each other's inventory to their respective customers.

Tying with Tencent brings Flipkart "significant expertise," as well as funds to keep going in a market that requires deep pockets.

Microsoft recently announced that Flipkart would be using its Azure cloud as its public cloud platform, instead of using its own data centers. Microsoft is targeting startups in India with its cloud services.

Google and A.T. Kearney projected in a study last year that online retailing will contribute as much as 25 percent of the total organized retail sales by 2020 and will reach $60 billion in gross merchandising value by then.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

John Ribeiro

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?