3 Reasons Why Flipkart Has Decided To Kill eBay India On August 15th

This is certainly an end of an era.

eBay, one of the oldest ecommerce portals in India will be killed by Flipkart on August 15th, which is India’s Independence Day.

Launched in 2005, that is 18 years ago, eBay India was known to be a powerful marketplace, a place where anything and everything was available, for a price.

Flipkart had acquired eBay India’s operations last year, in a complex corporate reshuffling – While Flipkart raised $1.4 billion, at that time it highest VC funding, it received $500 million from eBay, and gave away shares worth $200 million to eBay India. After the deal, eBay had control of 6.5% of Flipkart’s shares.

Now, Flipkart has decided to end its existence all together.

In 2016-17, eBay India had clocked revenues of Rs 391 crore against loss of Rs 171 crore.

Herein, we try to find out why Flipkart has taken this decision, and what does it imply to the overall ecommerce sector of India!

Reason #1: Things Didn’t Work Out

The primary objective of eBay India’s acquisition by Flipkart was to facilitate ‘cross-border’ online trade. Merchants of Flipkart were supposed to have easy access to eBay’s massive global customer base, and on the other hand eBay’s traders were expected to cater to Indian demand with their world class global products.

A win-win situation for all.

However, things didn’t work out it seems.

Immediately after the acquisition, Flipkart relaunched eBay India as Mint-kart, which was designed as a platform for used products. But faced with stiff competition from Quikr and Olx, along with Amazon and other ecommerce players, this didn’t take off.

And the eventual result is open for all.

Reason #2: Walmart-Flipkart Deal?

Now, this is something which has been tried to be kept under the wraps, but the secrets are slowly and gradually tumbling out.

eBay never wanted Walmart-Flipkart acquisition to take place, and when the negotiations were on, eBay had subtly made it clear as well.

However, the deal went through, and immediately after that, eBay decided to part ways as well. Albeit structurally and strategically.

In May this year, after the announcement of Flipkart-Walmart deal, eBay India said that they will end strategic collaboration with Flipkart, and launch themselves as eBay India standalone.

At that time, they gave this statement: “Following the close of the transaction, we also will be ending our current strategic relationship with Flipkart, which includes unwinding our commercial agreements with Flipkart and terminating Flipkart’s license to use the eBay.in brand.”

This is clear that the entry of Walmart changed several things, and eBay was never happy to have partnered with them. Hence, Walmart can be described as a major reason for eBay India’s premature death.

Reason #3: Start Of A New Story

However, history is history. We should now look into the future, and Flipkart has mapped it out well.

As per reports, and statements issued, Flipkart will now use eBay’s experience to launch a marketplace of refurbished products, something on the line of Mint-Kart.

Flipkart CEO Kalyan Krishnamurthy has informed all employees: “Based on our learnings at eBay.in, we have built a brand new value platform launching with refurbished goods — a large market which is predominantly unorganised,”

Here, Flipkart is attempting to merge their experience of eBay India, and their acquisition of F1 Info Solutions & Services, which provides repair facility of gadgets and laptops all over the country.

This now clear that Flipkart wants to compete against Quikr and Olx, and the shutting down of eBay can be the first step in that direction. As per insider reports, all sellers and buyers of eBay India can be soon migrated to the new platform, whose name hasn’t been revealed yet.

Do share your opinion on closure of eBay India, by commenting right here!

Closed Image Credit: Frechdachsweibchen from commons.wikimedia.org