EBay targets India

30 April 2012

MUMBAI: Online vendor eBay is to increase its investment in the highly competitive and rapidly-growing Indian e-commerce sector.

Reuters reports that foreign-owned online retailers including eBay and Amazon are set to mount a challenge to domestic Indian players including Flipkart, OLX and Quickr.

Speaking to the news source, Muralikrishnan B, eBay's country manager for India, said the firm was planning to raise its marketing expenditure in the nation significantly, but will adopt a conservative growth strategy going forward.

Muralikrishnan said: "We have chosen the cautious route, unlike a lot of Indian businesses who are blindly investing money [in e-commerce] without having an eye on sustainability or profitability."

Despite having been launched in 2005, eBay India remains a comparatively minor player on the subcontinent, with estimates from the Internet and Mobile Association of India indicating that the site currently makes around six sales per minute, compared to market leader Flipkart's 20.

Competition is also set to intensify in the years to come, with Amazon, the world's biggest e-commerce firm, still yet to launch an Indian portal – though the firm recently acquired local price comparison site Junglee.com.

Muralikrishnan added: "At some point of time Amazon will enter India and they are a credible threat to us."

According to its latest financial statements, eBay derives around half of its net revenues from outside of its US home market.

Data from Technopak cited by the Reuters report has suggested that the Indian e-commerce market was worth around $10bn in 2011, and will grow to $200bn by 2020.

Within this total, around $600m was generated by the "e-tailing" segment, which refers only to companies like eBay that sell retail goods online.

Technopak forecast that the segment will be worth $70bn by 2020, implying a CAGR of 70% over the next eight years.

Data sourced from Reuters/Economic Times; additional content by Warc staff