eBay is creating a space for itself

This Diwali, e-commerce companies made all the noise, enticing consumers with deep discounts and freebies. Flipkart, Snapdeal, Amazon and rest of the pack were all over the media with their advertisements and campaigns. While Flipkart’s much hyped ‘Big Billion Day’ sale bombed, rivals Snapdeal and Amazon made the most of it through their marketing campaigns. It didn’t matter that their retail cousins complained that e-commerce was undercutting prices and destroying the brick-and-mortar business.

Amidst this, eBay India was conspicuous by its absence. And unlike its peers, the company was making friends with the retail industry. In July, the American e-commerce giant signed an agreement with the Confederation of All India Traders, an apex body representing the trading community in India. The deal aimed at enabling “Indian traders to use eBay as a platform for retail exports”.

But this news aside, it seemed there was nothing else to write about eBay in India. It was among the early birds in the Indian e-commerce industry, entering the market in 2005 by acquiring Baazee.com . But since then, it seemed to have failed to connect with consumers.

In comparison its American peer Amazon came in only in 2013 but critics say that the Jeff Bezos-company has won the eye-ball war. So, is eBay losing out in the Indian e-commerce battle? The e-commerce industry is in a high-growth phase with players fighting for a larger pie in the $3.5-billion market, which, according to a Crisil report, is set to grow to $70 billion by 2020.

But Latif Nathani, Managing Director, eBay India, told BusinessLine that the company is not in any race for the number one position. “We have been at the forefront, pioneering commerce in India since the last nine years, and have established strong brand equity, large and loyal user base, a strong global technology platform and continue to strengthen our position in the market,” he said. Taking a swipe at his local peers, he added: “We believe in inclusive growth, where the market can evolve taking both online and offline retailers together.”

The company has had its share of success. It is India’s largest online marketplace with over 35,000 listed sellers. Amazon has over 10,000 and Flipkart and Snapdeal each have less than 5,000 sellers. On an average day, while eBay India sells 18 products a minute, Flipkart clocks 20. Nathani added that eBay India has over 30 million products listed across 2,000 categories. It is followed by Amazon, which has over 18 million products.

Like its parent company, eBay India has a marketplace model, wherein a consumer sells to another on its platform directly. The goods traded are mostly pre-owned. In the US, pre-owned products form a major part of the sales, helping eBay Inc’s revenues grow two-fold in four years, from $8.7 billion in 2009 to $16 billion in 2013. In India, it initially gained popularity but could not hold on to its consumers for long. Nathani declined to share financial information on the India unit.

Ashish Jhalani, founder of consultancy firm e-Tailing India, says: “For years eBay followed their US strategy, which did not account for nuances in India. It is now adapting to the needs of Indian e-commerce and is seeing better traction.” So now, says Jhalani, eBay India is focusing on exports. “This has been leading to their growth lately,” he added.

The 15,000 exporters listed on eBay are benefiting. About 36 per cent of them saw 20 per cent growth and over 30 per cent grew by anywhere between 21 and 40 per cent, the company claims. More than 50 per cent of eBay’s sales comes from exports, something no other e-commerce player in the country can boast of.

“Indian merchants have potential to be one of the largest retail exporters and we are helping boost the trade,” says Nathani. But with competitors vying to snare customers, eBay has to be careful.  "To prevent leakage of consumers to peers, eBay India needs consumer retention strategies using the big data it already owns,” says Srikanth Chunduri, Co-founder & COO, eMart Solutions, a loyalty and consumer engagement company. eBay didn’t disclose its customer base. The company will also have to match the marketing chutzpah of its competitors to protect its customer base.

However, it has been aggressive on the deal counter. Last year, eBay picked up a stake in Snapdeal for an undisclosed amount and might participate in another round of fund-raising in the Indian company. Says Nathani: “Our partnership with Snapdeal seeks to drive more consumer demand for eBay and Snapdeal merchants along with a wider selection for consumers.” Critics, however, believe that eBay could end up acquiring Snapdeal. Surely then, eBay is very much in contention in the e-commerce war.

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