Financial Daily from THE HINDU group of publications
Thursday, Jun 24, 2004
Financial Daily from THE HINDU group of publications Thursday, Jun 24, 2004 |
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Info-Tech
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E-Commerce & E-Business Marketing - Online Marketing eBay plans to leverage Baazee for global trading Our Bureau
Mumbai , June 23 HAVING decided to acquire Baazee.com Inc, the world's leading online market place eBay now plans to leverage the Indian subsidiary - Baazee.com India - to push global trading (read export transactions) conducted online. Currently 10 per cent of eBay sales are through transactions between (buyers of) countries such as Germany, France and the US. eBay will acquire all outstanding shares of Baazee.com Inc and its subsidiary Baazee.com India Pvt Ltd for approximately $50 million (around Rs 231 crore), plus acquisitions costs and post-signing adjustments. The acquisition is expected to close in the third calendar quarter of 2004. The agreement allows eBay to expand its global footprint in the nascent yet growing Indian market. In India, Baazee.com has a community of 1 million registered users. "We did not break even but came close to it. "Since we are a leading Indian market place, eBay found us a matching proposition," Mr Suvir Sujan, Co-CEO, Baazee.com said. Citing IDC statistics, Mr.Gil Penchina, VP, International, eBay Inc told Business Line that India offered a huge market for the online trading place and the Baazee acquisition would help eBay to tap this potential market. According to IDC's Internet Commerce Market model (January 2004), India's Internet penetration is expected to touch 30 million in 2006 from the current 17 million Internet usage base. "eBay plans to use the Indian subsidiary to increase the export transactions conducted online since we have a large group of buyers who are interested in sourcing textiles and other items from India. So there is a huge market awaiting for exports to take off and when the tariffs come down, I think exports will take off," Mr Penchina said. Commodities including textiles, garments, leather, apparels, gemstones, traditional handicrafts and jewellery are in great demand and eBay hopes Indian exporters will take advantage of eBay to sell to overseas buyers. "For instance, in gem-cutting, buyers from US or Europe can source from Israel, Thailand and Netherlands and now with India also on our (online) marketplace, buyers can take advantage of the (lower) costs offered by gem-cutting here," explained the eBay VP. Factor in issues such as expected reduction in tariff and Customs duties, eBay anticipates more business from US buyers through Baazee.com. Having identified India as one of its primary markets along with China, Singapore and Hong Kong, eBay plans to invest substantially through spends on technology and advertisements. According to Mr Penchina, the Asia Pacific region will be a thrust area for eBay over the next ten years.
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