Flipkart formally acquires eBay India: Global avenues to open for Indian buyers, sellers

BT Online   New Delhi     Last Updated: August 2, 2017  | 09:06 IST
Flipkart formally acquires eBay India: Global avenues to open for Indian buyers, sellers

Flipkart has completed the formal acquisition of eBay India operations, opening global markets for its sellers and buyers.

Following the formal merger of the two e-commerce giants, Flipkart announced to open the global inventory of eBay to its customers in India. Sellers associated with Flipkart will also be able to take their products to a worldwide consumer base simultaneously. eBay India will continue to operate independently as a part of the Flipkart group.

"Effective immediately, Flipkart will own and operate eBay.in, which will remain an independent entity as part of Flipkart," Flipkart said in a statement.

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Flipkart and eBay have also entered an agreement for cross-border trade, as a result of which customers of Flipkart will have access to a wide array of global inventory on eBay. Meanwhile, sellers on Flipkart can market merchandise from their inventory to eBay's customers, which was previously available only to Indian buyers. In other words, sellers on Flipkart now have an opportunity to take their businesses to a global platform.

The deal was initiated in first half of April this year when eBay made cash investment of $500 million (Rs 3,203 crore) and sold its eBay.in business to Flipkart in exchange of an equity stake in the company. The Flipkart group raised $1.4 billion (approximately Rs 9,030 crore) from global technology leaders - US-based eBay, Microsoft, and  China-based Tencent - during what it called the 'biggest investment in its 10-year history'.

"Our coming together directly benefits Indian customers and sellers for whom we want to provide the best possible e-commerce experience. This is a step in that direction," Flipkart CEO Kalyan Krishnamurthy said in a statement.

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The merger announcement comes a day after its smaller rival Snapdeal called off another merger deal with Flipkart to pursue an 'independent path' instead.

Although, Snapdeal was not explicit about the other partner in the deal, it had been widely reported that it was negotiating a merger with Flipkart for the last five months. Flipkart had reportedly offered USD 900-950 million for the acquisition of Snapdeal, but the deal failed to come through.

Now, Snapdeal co-founders, Kunal Bahl and Rohit Bansal intend to run a stripped-down version of its online marketplace. This has been underpinned by the firm's early investors Kalaari Capital and Nexus Venture Partners as well, sources said.

Snapdeal will be able to financially sustain itself with the sale of certain non-core assets, the firm said in its statement.

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