Major eCommerce retailer, Flipkart announced its merger with eBay India’s operations on Tuesday. With this news, retail eCommerce is expected to undergo a paradigm shift in the country. As a result of the merger, eBay.in will now operate as a Flipkart group of company. Although the official announcement came hardly a few hours ago, the deal was being worked upon since April this year.
It may be recalled here that the Flipkart group raised $1.4 billion from global brands like eBay, Microsoft and Tencent this April. According to a well-placed source, who prefers not to be named, the raising of the funds was the initial move by both eBay and Flipkart to strike a merger deal.
However, before this announcement came through, the market was eagerly awaiting the merger of Flipkart with its rival Snapdeal. The two major eCommerce retailers were reported to work on a separate merger plan for the last few months. Somehow, the deal fell apart as Snapdeal announced earlier this week that it was making a U-turn from all such discussions.
While announcing its merger with eBay India, Flipkart issued a statement that read, “Effective immediately, Flipkart will own and operate eBay.in, which will remain an independent entity as part of Flipkart.” The exact figures involving the deal are yet to be estimated. However, on a rough speculation, eBay parted with $500 million and also handed over its eBay.in business to Flipkart.
Both the commercial brands are focusing on cross-border trade became obvious from the following lines, punched in the Flipkart statement, “As a result, Flipkart customers will get expanded product choices with the wide array of global inventory available on eBay while eBay customers will have access to a more unique Indian inventory from Flipkart sellers.”
Experts opine the partnership will provide Flipkart with a great opportunity to set its footprint on the global arena. Even a statement attributed to the Flipkart CEO, Kalyan Krishnamurthy read, “Our coming together directly benefits Indian customers and sellers for whom we want to provide the best possible experience of using the platform to fulfill online orders. This is a step in that direction.” This merger deal seems to have facilitated retail eCommerce in India to come of age.
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