comscore
News
> > Happy for Flipkart, but in reality it’s failure on part of eBay in India

Happy for Flipkart, but in reality it’s failure on part of eBay in India

The rise of Flipkart can be debated. But that eBay fell from its position of clout is certain.

Tags:
ebay

Yesterday, Flipkart finally announced that it was acquiring eBay India. Through my early years of online shopping, there was just one credible name in India, and that was eBay. Along with me, quite a few of my friends seemed to trust eBay more than Baazee. In 2004, eBay acquired Baazee and eBay India was born. In the true sense, e-commerce in India was born. It’s a different story that somehow later eBay took a backseat, while I enjoyed attempts to impress me as a consumer by the numerous other e-commerce entities that were flourishing in India. What I found amusing was that picking the best discounts on other e-commerce sites was a business model. That’s like picking the best deal for a dozen of mangoes in the fruit market.

Certainly, e-commerce involves cutting edge technology. Big data, analysis of consumer trends and real-time decision making and adoption, you’d see it all in an e-commerce set-up. E-commerce players may sell fruits and vegetables, but the business of e-commerce isn’t one of buying and selling vegetables. It needs the prudence of initial investment into a robust supply chain, scalability in IT frameworks to serve a rising consumer base, and also be intelligent enough to understand what consumers want. That’s the golden question every business wants to know the answers to. ALSO READ: Flipkart gets $1.4 billion investment, but can it finally take on Amazon now?

Two years ago, I read similar reports about eBay’s performance. An article dated February 2015 on Time, chronicled the rise and fall of eBay. And all I recall while reading it was the emphasis on investors. To summarize the article in two sentences, it reads, “The result is that there’s little momentum left for eBay, once the champion of e-commerce momentum. No one dances around and sings “I did it eBay!” anymore.” What the article is referring to is the kind of fans eBay once had. People vouched by their experience with eBay. It was an addiction. And in the recent past, users weren’t addicted to eBay anymore. What was once owned by eBay is now taken over by Flipkart and Amazon in the minds of consumers. eBay was better off like yet another service, more like a Shopclues. Stuck in the level of awareness in consumer surveys. But never climbing up to adoption or advocacy.

All the best deals were happening on Amazon and Flipkart. All the phones were there. All the exclusive offers were there. Where was eBay? Nowhere in sight. And then comes the greater defense. But, it’s a marketplace. It’s a different model. Be kind. Which is what brings me to an article that appeared last year in the Harvard Business Review aptly titled, ‘6 Reasons platforms fail.’ When I read news of the downfall of eBay, I read the article again. To get a sense of whether it was prophetic in anyway. I could see eBay in a couple of places. But the most pertinent point conveyed in this article was reason 6. Failure of imagination. In other words, failure to innovate. Innovation is such a cliche. Yes, change is imminent. In an industry as dynamic as e-commerce, the lines are dwindling – between sellers, buyers, marketplaces, and e-commerce. Wouldn’t surprise you then that Amazon and Flipkart are both working to help you become a seller. Both have seller programs that are aggressively looking at scaling. Yes, anyone can sign up to become a seller. Then why on earth would you need an eBay?

There was no USP anymore. In retrospect, eBay ended up burning a lot of money through the years. It did so in China. It did so in India. It’s a name with impressive consumer recall. But none of it could translate into business accomplishment in India. One of the products of eBay is Elon Musk. Well not directly. But in 2002, Elon Musk sold PayPal to eBay for $1.5 billion. Out of this, Musk received $165 million. That’s seed money he used to fund a few of his ‘projects’. He is where he is today. But eBay doesn’t seem anywhere close.

All said and done, the deal with Flipkart is the best that could happen to eBay. According to the official announcement by Flipkart, sellers on Flipkart can now sell to eBay customer in the US. That’s a big win for sellers in India who can now tap into the US market. That’s as good as Flipkart USA. That’s definitely a win for eBay customers in the US who have access to Flipkart sellers and in turn products from India. Now while it may not address the vast majority of the American consumer base for eBay, the prominent Indian community in the US would see value in such an offering. But what stands for me, is an e-commerce behemoth, just wound up from one of the largest markets in the world.