ebay American e-commerce marketplace eBay looks to close sale of its India business to Flipkart early in the second half of this year and hopes its $500-million investment in and strategic partnership with the country's top online marketplace will boost its India play.
"I'm very excited about this new exclusive partnership, which enables us to increase our penetration in India by making eBay's global inventory accessible to a significantly larger set of Indian consumers," said Devin Wenig, CEO at eBay. "We're committed to winning in India through this partnership," he said in an analyst call in the US following the company's first quarter earnings results for 2017 on Wednesday.
eBay will stop reporting active sales in the country and related financials once the sale is closed. "We expect this deal to close early in the second half of 2017, and upon deal close we will no longer report active buyer GMV and related financials for eBay India," said Scott Schenkel, chief financial officer at eBay.
"We do not expect the GMV or financial impact to be material to our overall 2017 results. However, we do expect to remove approximately 4 million buyers from our active buyer reporting," he said.
eBay along with Microsoft and Tencent pumped in $1.4 billion into Flipkart in the biggest funding round in the Indian e-commerce space, announced earlier this month. The deal included sale of eBay.in to Flipkart and an exclusive cross-border trade agreement.
Wenig said eBay's active buyers will have access to "more unique Indian inventory provided by Flipkart". Likewise, Flipkart customers will have access to eBay's global inventory.
eBay had entered the Indian market in 2004 and started operations through the acquisition of News Corp-backed Bazee.com. The company, however, failed to capitalise on its first-mover advantage and eventually lost out to Flipkart and Amazon.