Flipkart is acquiring eBay India. One more mistake?


So the grapevine is that Flipkart is acquiring eBay India*.
Flipkart recently raised $1Bn at a down valuation – the round led by eBay Inc, Microsoft and Tencent.

Why is this a ‘one more mistake’ for Flipkart?

Culturally, the two companies are totally different. eBay is a pure play marketplace, while Flipkart FWIW is a forced marketplace due to funding structure (WS retail still is the number 1 seller?).
Is that a simple difference?
No. And it’s not just about the format, it’s about the way the two companies look at marketplace model.
To give you an idea, eBay gives you seller contact details for you and the seller to figure out the deal. Flipkart is anything but transparent. Flipkart seller ratings may not matter, but sellers in eBay will beg you to give them a good rating.
It’s just different DNA.
And of course, eBay India has made multiples from its stake sale in Snapdeal, which is now talking to Flipkart and others for acquisition (this is so crazy, right!)
My guess is that this will turn out to be a bad idea for Flipkart, unless this deal was part of the reason why eBay US invested in Flipkart.
*source.

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7 comments
  1. Also Flipkart’s marketplace is curated (i.e. product descriptions are standard and competing quotes are collated) whereas eBay’s is not

  2. Quite sad to see investors dictating terms and conditions – even before the funding !
    Clearly, Flipkart founders wouldn’t ever wanted to acquire eBay – they know that there is no alignment.
    Was Microsoft cloud deal also a part of this? I strongly believe, YES.

  3. Different ways/formats of working across the 2 companies might not be a valid reason to reject this kind of merger/acquisition. There are many companies in the past with different work DNAs coming together to make a successful entity, though this requires a well thought out integration plan.
    The entire success depends on how the leadership handles the merger and the vision for tomorrow.

  4. its time to raise your hand for booking your product from Flipkart instead of amazon they will give good services. because Flipkart acquires eBay’s India biz to fight Amazon.
    so fight begin let’s see what happen next.

  5. Hi Ashish,
    I agree with you. As per my opinion, it would be a big mistake for Flipkart because it’s already running in 23% Loss from 2015 to 2017 and the loss is continuing. So I am able to get why this deal is done and why this thing is needed now? One more thing I would like to know that why the big investors like Microsoft, Tencent and eBay has invested their money in it? Do you have any idea about it? But from inside as an Indian, i am happy that now Flipkart has become an Indias largest online shopping portal and competing Amazon. So let’s hope for the best.

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