eBay taps Indian growth

30 March 2012

NEW DELHI: The rapid growth of India's ecommerce market is encouraging eBay, the online retail site, to ramp up its focus on the country, where competition is intensifying sharply.

The firm established an Indian platform in 2005 and boasts over 3m registered users. It has also launched apps for Apple's iPhone and Google Android devices in recognition of the mobile web's rising importance.

"India is among the fastest-growing markets and has been identified as one of the significant potential markets for the company," Muralikrishnan B, country manager at eBay India, told the Wall Street Journal.

More specifically, eBay believes the online retail sector may expand by almost 100% this year, and "might accelerate even further", demonstrating the considerable possibilities held by the segment.

At present, the firm derives approximately 80% of its Indian returns from fixed-price purchases of products including cameras, mobile phones, laptop computers and flat-panel TV sets.

One aim for the company is to stimulate web users to make acquisitions in categories such as apparel and footwear, which offer greater margins, rather than impulsive choices like books and gadgets.

In a bid to achieve this objective, eBay has begun selling products from lifestyle and sports brands like Bata, Catwalk, Fabindia and Hidesign and Reebok.

Moreover, the organisation has recently unveiled new ads premised around the tagline "Want it. Get it", highlighting the diverse range of goods it has on sale.

"Our new campaign is congruent with our goal of step jumping e-commerce trial in general and eBay trial in particular amongst shopping enthusiasts across the country," said Kashyap Vadapalli, chief marketing officer, eBay India.

Technopak, the consultancy, estimates that India's ecommerce sector is currently worth around $600m per year, but should increase in value to more than $70bn by 2020.

Operators like Amazon, Alibaba, Groupon, Flipkart and Snapdeal are all ramping up their efforts to gain ground in India, in reflection of this potential.

"A lot of the large global internet guys missed out on the Chinese internet opportunity," said Kunal Bahl, the CEO of Snapdeal. "So India is of great strategic importance to a lot of companies out there."

Data sourced from Wall Street Journal; additional content by Warc staff