Right after Walmart's announcement to buy 77 percent stake in Flipkart for 16 billion USD, eBay announced it is severing business relations with Flipkart.
Last year, in exchange for an equity stake, eBay which is one of the biggest global online market players, invested 500 million USD and sold eBay.in to Flipkart. This had helped sellers on Flipkart's platform in their global sales. Now, the company says that it has notified Flipkart of its intentions to sell its equity holdings in Flipkart, which eBay estimates to be 1.1 billion USD in value.
"eBay has notified Flipkart and Walmart that it intends to sell its holdings in Flipkart, which will represent gross proceeds of approximately $1.1 billion. 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," said the company in a statement.
We will be back in the India market soon with eBay.in. We will start by bringing import inventory into India and opening up the worlds markets to Indian merchants
— Devin Wenig (@devinwenig) May 9, 2018
Ebay plans India re-launch
While the online auction and shopping website has had tremendous success in the US, it has struggled to make a similar impact in India despite launching in 2005, two years before the launch of Flipkart and five years ahead of Amazon launch in the country.
Devin Wenig, Global CEO of eBay, said on Twitter that the company will re-initiate its strategy in India by “bringing import inventory into India and opening up the world’s markets to Indian merchants”. eBay India is going on the path of cross-border selling without Flipkart.
For its India operations, the company's focus will be initially on cross-border trade, assisting domestic buyers and sellers to connect with global businesses on their platform. “We believe there is huge growth potential for e-commerce in India and significant opportunity for multiple players to succeed in India’s diverse, domestic market,” the company stated.