Flipkart’s acquisition of eBay India has become a launch pad for it to gain access into attractive export markets and the company is gearing up to tap the multi-billion dollar cross-border e-commerce markets, estimated to grow to $1 trillion by 2020. While currently only Amazon.in (through its global selling program) and eBay India allow sellers registered on their platforms to sell goods outside India, Flipkart had for a long time missed out on this opportunity. The deal is expected to close in a few months’ time.
Even while Amazon made a delayed entry into the Indian e-commerce market, it realised the potential of on-boarding Indian exporters. Last year Amazon launched its global selling programme in India and has currently 20,000 Indian sellers listing over 45 million products for the overseas market.
Now Flipkart has the chance to have a crack at this market, and wants to catch up with Amazon.
eBay.in is an attractive platform for Indian sellers looking for western markets and gives the exporters access to 150 countries including US, UK, Australia and Germany.
A recent US regulatory filing by eBay Inc had said Flipkart and eBay will exclusively pursue cross-border trade opportunities together. A Flipkart spokesperson told FE, “eBay, being a pioneer of e-commerce globally, has a unique position in the market that will be a great addition to Flipkart’s strong presence along with its group companies. The deal with eBay gives Indian customers access to eBay’s vast international product catalogue, while also giving Indian sellers a platform to sell in the global markets that eBay operates in.”
Sreedhar Prasad, Partner, E-Commerce & Start-ups, KPMG India, said, “Cross border e-commerce is silently growing in India with customers buying electronics accessories from Chinese websites as well as boutique fashion from European and US portals. The propensity to buy from international sellers are increasing. On the other side, Indian sellers in specific categories like bags and fashion are today listing in global websites. This trend is expected to continue and soon we will see sellers from across the globe having presence in the marketplaces that operate in India”.
Flipkart’s acquisition of eBay’s Indian arm has also come at a time when the Indian government is encouraging exports through e-commerce portals.
The union government has in its foreign trade policy 2015-2020 has decided to provide incentives to promote exports of goods hosted on a website and dispatched through courier or postal mode. As per India’s FTP 2015-20, the incentives for e-commerce exports are under the Merchandise Export from India Scheme (MEIS). “Goods falling in the category of handloom products, books / periodicals, leather footwear, toys and customized fashion garments, having FOB value up to Rs 25,000 per consignment (finalized using eCommerce platform) shall be eligible for benefits under FTP,” it stated.
Source: Financial Express