eBay has announced it will sell its shares in Flipkart, in light of Walmart’s $16 billion acquisition of a majority stake in the Indian e-commerce company.
Last year, eBay sold its Indian operations to local e-commerce giant, Flipkart as part of a $1.1 billion deal that included agreements that allowed Flipkart to use eBay’s brand as its own. However, after Walmart went public with its deal to purchase a 77 percent stake in Flipkart on Wednesday, eBay announced that it would also be selling its shares in the company.
In a tweet, eBay’s CEO, Devin Wenig, said the company’s newly invested interest in the Indian market would mean importing inventory into India and opening its cross-border markets to Indian merchants.
eBay’s CEO reveals the company’s plans to exit Flipkart and bring back eBay.In.
“We plan to relaunch eBay India with a differentiated offer to focus initially on the cross-border trade opportunity, which we believe is significant,” eBay said in a statement. “We believe there is huge growth potential for e-commerce in India and significant opportunity for multiple players to succeed in India’s diverse, domestic market.”
After Walmart confirmed its successful negotiations with Flipkart to become a major player in the Indian e-commerce business, rumours also started circulating that major shareholder, SoftBank, might also sell its shares. However, this is yet to be confirmed.
Amazon was also rumoured to be in negotiations with Flipkart to purchase a share in the company, a proposal which insiders believe was rejected because of possible legal repercussions that would come if Flipkart revealed sensitive commercial information with its biggest local competitor.
India has become a hot marketplace for online businesses, as current projections predict the Indian e-commerce market will grow to US $200 billion by 2026, due to increasing internet and smartphone penetration across the country.
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