In the recent funding that made almost everyone including investors, take a sigh of relief is now bringing many other newer dynamics to the ecommerce ecosystem in India. In one of the recent updates as per the media sources it is getting widely spread that Flipkart is going to acquire eBay India. The amount is still to be disclosed but is expected to be around $2 Billion.

If Flipkart is buying eBay then how are they getting money to run Discount based Mega Sales Campaign?

One of the questions that keeps confusing Entrepreneurs is how is this acquisition happening and if at all Flipkart raises $ 1 Billion and buying out eBay for $ 2 billion then how are they left with money to run the operations. Lets understand how it may have been planned. eBay is a highly valued company, they might not be successful in India but they are hugely and widely spread in the US, and is one of the marketplaces which started the culture of buying online, globally! They have been valued at $25 billion in May 2016 which is second higher than Alibaba. They will sell off their equity shares at premium and would virtually transfer all the debts to Flipkart. While they do so, they are also buying equity at premium pricing from Flipkart against their funds, which would settle the accounts with lesser money and more shares. So eventually the companies may transact to show the Registrar of Companies but final outcome shall be Flipkart getting hard cash to run their operations in India.

eBay will also Strategies few operational moves against Amazon, for Flipkart’s win in India

One of the biggest threats of all times to Flipkart has been Amazon with their global outlook, operational efficiency and a great bonding with the users. Amazon has better Net Promoter Score and repeated sales of consumers than what  Flipkart dreams to achieve. Also the reviews and rating system is far comprehensive, relevant, trustworthy and rewarding than Flipkart’s which is resulting to bring better buying decisions for consumers.
Flipkart is really getting closer to bring better solutions to Indian Consumers but have been missing to hold them for a longer duration. eBay can significantly help Flipkart improve on these operational issues with their actionable insights and global experience, thus bringing Flipkart closer to Amazon. On the other hand Alibaba is waiting to be onboarded and must be working on its predatory pricing to claim the market share of these existing behemoths.

India is the fastest growing Ecommerce Markets across the Globe!

According to Forrester Research, fifth of total retail sales (approx.)will take place online by or before 2021 in Asia Pacific. The major pie of 78 percent of that will be coming from mobile (against 63 percent in 2016). The study further adds that online retail via mobile will grow at CAGR of 15.6 percent, to reach $1 trillion in 2020 nearly double from $539 billion in 2016. The report also concluded tat China may remain the largest market for e-commerce globally, followed by the US; but it is India that is the fastest-growing e-commerce market.

Consolidation will bring rationalization and stability to the existing players in India

Some of the other leading players which are experiencing heavy cash crunch  and are about to die if not funded, will be submerged in the upcoming deluge of the Trio: Flipkart, Amazon and Alibaba.  The list will first include Snapdeal which is already been showcased to its competitors for sale followed by Shop clues which is going through an internal conflict already. Other players like Infineum may bow down to these big giants once they started their predatory schemes and luring pricings. The ecommerce will soon started getting influenced with these three players dynamics and the consolidation will further bring stability, as small players will remain susceptible to different forms of crisis situations.

The Three sided Ecommerce War is about to begun
Flipkart vs Amazon vs Alibaba (Paytm) is going to get into a war to hold supremacy than the other two. Eventually money shall not be a problem for all of the listed warriors and some greater and newer dynamics will be brought, to further disrupt the ecommerce in India. B2C in India shall only be witnessing surge with the onboarding of next 350 million consumers in India through Mobile Broadband penetration through the Jio drive to digitalize India. On the other hand the B2B segment still contains opportunities for these big giants to venture.

E Link: http://www.thestartupmojo.com/snapdeal-is-put-for-sale-to-flipkart-and-paytm/

Keywords: Flipkart buys eBay in India, Flipkart gets $1 billion funding, Flipkart, Amazon, Alibaba, Paytm, Ecommerce future in India, Ecommerce in India, Ecommerce

Pic Courtesy: Factor daily

 

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