Flipkart has been operating eBay.in for the last year but will no longer be participating in the strategic partnership and instead launch a new platform to sell refurbished goods.
Flipkart Chief Executive Kalyan Krishnamurthy communicated the news to the employees in an email on Monday notifying of the company’s intent to part ways with eBay India and refocus its efforts.
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Flipkart to focus on refurbs
“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 unorganized,” the email said. “With Flipkart’s customer base and F1 Info Solutions & Services in our group portfolio, I believe that we can solve the key barriers to refurbished — trust & convenience — at scale.”
It’s not just Flipkart that is repositioning its strategy, eBay announced the demise of the partnership back in May and revealed its intention to relaunch eBay India with a focus on cross-border trading.
“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,” eBay had said in a statement earlier.
Ceased trading
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To focus the efforts on Flipkart’s new venture of refurbished products, the company will stop trading on eBay.in as of August 14 and will transition to the new platform. “Our endeavor will be to ensure that all the eBay.in sellers and customers migrate to the new platform over time with a remarkably enhanced experience,” Krishnamurthy added.
It seems that Flipkart has decided to instead go its own route and focus on creating an independent brand that it can market openly as opposed to helping grow another business. Krishnamurthy continued to add that “We [Flipkart] are committed to investing in this independent brand.”
India Time reports that Flipkart had originally bought the India operations of eBay last year. The original funding round of $1.4 billion in 2017 attracted the likes of Microsoft, Tencent, and eBay where it invested about $500 million in Flipkart and got another $220 million worth of shares from selling its India business to Flipkart.
eBay looking at imports
As for eBay, the company said it notified Flipkart and Walmart that it intends to sell its holdings of 6.55% in Flipkart, worth around $1.1 billion. The eBay chief executive Devin Wenig said on Twitter that the company’s focus would change to “bringing import inventory into India and opening up the world’s markets to Indian merchants.”
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It appears that eBay has identified that it is not making the kind of impact in the Indian market has it intended and sees the potential of instead bringing import inventory into the country while Flipkart is embracing selling refurbished products and is looking to maximize exposure of its brand.
Looking at why eBay India didn’t see the success it expects, one former executive who worked at eBay India said: “When the market turned in India during 2011 and 2012, they did not invest.“ It is estimated that the company currently has gross sales of below $300 million, mostly in the electronics category, which is a relatively small impact.
We want to hear from you – did you use eBay India for your product purchases or would another online retailer attract your business? Similarly, would the emergence of Flipkart now as its independent brand focusing on refurbished products appeal? Leave us a comment below.
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