eBay Inc (NASDAQ:EBAY)’s growth in India has been slowing down even though they had a head start by entering the Market in March 2005.Its revenue witnessed a growth of just 23% in fiscal year 2015 compared to 33% in 2014. eBay has slowly been losing their grip to home-based e-commerce, in the likes of, Flipkart and Snapdeal, who reported 100% increase in their sales. Amazon.com, Inc. (NASDAQ:AMZN) also seems to have surpassed eBay regarding revenue collection from the Indian market. Amazon has heavily invested in the market, and this seems to be paying out.
So what happened to eBay in China is happening again in India? eBay entered in China in 2004, was the dominant player until homegrown players the like of Taobao, and Alibaba Group Holding Ltd (NYSE: BABA) came into the market. The competition was so fierce that by 2006 eBay accepted defeat. Later on, eBay quit the Chinese market since it had lost the battle. The main reason for their defeat was that they never understood the market and the customers. Is this scenario, likely to happen in India?
eBay India is currently facing several problems from both buyers and customer. Customers are particularly unhappy with delays in delivery and refund, bad customer service, and fake listing. It’s more than 30,000 sellers who are spread across 4,000 cities are also unhappy with remittance issues and seller support. The local player seems to be learning from this and is trying to avoid this scenario. They are slowly having a tight grip on the market and this definitely is bad for eBay.
Amazon.com, Inc. (NASDAQ:AMZN) believes Indian e-commerce to be a trillion dollar opportunity whereas Goldman Sachs Group Inc (NYSE:GS) estimates it to reach $228 billion by the year 2030. However, both believe the market will grow larger. India currently has less than 20% internet penetration, but the number of internet users passed those in the US by the end of Dec 2015. Since internet penetration in more areas is definite, these are the opportunities Amazon is noting.
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Though eBay might seem to lose the grip, it has a chance of revival. It recently entered into an agreement with the ministry of Women and Child Development in India with the primary aim to market globally, products made by women population in India.