EBay Online Shopping India:
Web-retailing giant eBay Inc. is fine-tuning its India strategy and investing more money as e-commerce soars in the country.
The San Jose, California, company is trying to steer Indian consumers toward buying high-margin products such as clothes and shoes--as is the trend among eBay shoppers in the West--rather than electronic gadgets and books, which are the most popular choices now but command lower profit margins and are less frequent purchases.
At the moment, eBay gets nearly 80% of its business in India from selling new fixed-price items such as cameras, cellphones, laptops, music players and flat-panel televisions.
"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's India unit, said recently.
He declined to say how much the India unit contributed to its parent's annual revenue. He also didn't say how much money the company is planning to invest in India.
The stakes are pretty big. India's nascent e-commerce market, which till recently was largely limited to people buying train, flight and movie tickets, is in the middle of a surge as a younger, tech-savvy middle class increasingly takes to shopping online in a country seeing rapid growth in Internet usage.
Consulting firm Technopak predicts a $70-billion annual market by 2020, up from $600 million now, which is just 0.05% of global online shopping. EBay itself estimates India's online shopping market in 2012 will grow close to 100%, and "it might accelerate even further."
The market's promise is attracting other global players such as Amazon.com Inc., Alibaba.com Ltd. and Groupon Inc. as well as a host of local startups such as Flipkart.com and Snapdeal.com.
"A lot of the large global internet guys missed out on the Chinese internet opportunity," said Snapdeal Chief Executive Kunal Bahl. "So India is of great strategic importance to a lot of companies out there."
To support the transition from electronics to lifestyle products, eBay India has recently roped in local and global fashion and apparel brands such as Bata, Reebok, Fabindia and Catwalk.
To make Indians more comfortable with online purchases--which still aren't regarded as a very financially secure process by many Indians--eBay offers the PaisaPay payment system, which is an escrow-like service, as local regulations don't allow it to operate its PayPal global digital payments platform in the country.
The company is also trying to get small businessmen such as jewelers and handicraft-makers to use its platform for exports, putting it in direct competition with Alibaba.com.
Ebay was among the first entrants into India's e-commerce segment, acquiring local e-commerce site Baazee.com in 2004 and launching local operations in 2005. It now has over three million registered users for its trading platform.
Amazon.com Inc. entered India last month with the launch of its price-comparison platform Junglee.com. Chinese business-to-business e-commerce company Alibaba.com Ltd. and U.S.-based daily deals operator Groupon Inc. are also fighting it out here.
Competition from Amazon is expected to heat up when foreign multi-brand retailers are allowed to sell directly to Indian consumers--which local laws currently don't permit.
According to online measurement firm ComScore, eBay topped the ranking of auction sites in India in February.
In an effort to keep the lead, eBay India--which offers applications that allow shopping over mobile phone platforms like the iPhone, Android and Windows--is investing in improving its services, Mr. Muralikrishnan said.
Mr. Muralikrishnan added that, despite the Indian market opportunity, not every e-commerce business model would succeed, noting that the current crop of niche online players and some daily deals operators are especially vulnerable.
Consolidation is already underway in the industry, with Flipkart acquiring another startup, Letsbuy.com, last month.
Ebay itself has received feelers from "quite a few players" that need capital to grow, Mr. Muralikrishnan said.
While eBay is not looking at an immediate acquisition, it continues to "evaluate opportunities," he added.
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Web-retailing giant eBay Inc. is fine-tuning its India strategy and investing more money as e-commerce soars in the country.
The San Jose, California, company is trying to steer Indian consumers toward buying high-margin products such as clothes and shoes--as is the trend among eBay shoppers in the West--rather than electronic gadgets and books, which are the most popular choices now but command lower profit margins and are less frequent purchases.
At the moment, eBay gets nearly 80% of its business in India from selling new fixed-price items such as cameras, cellphones, laptops, music players and flat-panel televisions.
"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's India unit, said recently.
He declined to say how much the India unit contributed to its parent's annual revenue. He also didn't say how much money the company is planning to invest in India.
The stakes are pretty big. India's nascent e-commerce market, which till recently was largely limited to people buying train, flight and movie tickets, is in the middle of a surge as a younger, tech-savvy middle class increasingly takes to shopping online in a country seeing rapid growth in Internet usage.
Consulting firm Technopak predicts a $70-billion annual market by 2020, up from $600 million now, which is just 0.05% of global online shopping. EBay itself estimates India's online shopping market in 2012 will grow close to 100%, and "it might accelerate even further."
The market's promise is attracting other global players such as Amazon.com Inc., Alibaba.com Ltd. and Groupon Inc. as well as a host of local startups such as Flipkart.com and Snapdeal.com.
"A lot of the large global internet guys missed out on the Chinese internet opportunity," said Snapdeal Chief Executive Kunal Bahl. "So India is of great strategic importance to a lot of companies out there."
To support the transition from electronics to lifestyle products, eBay India has recently roped in local and global fashion and apparel brands such as Bata, Reebok, Fabindia and Catwalk.
To make Indians more comfortable with online purchases--which still aren't regarded as a very financially secure process by many Indians--eBay offers the PaisaPay payment system, which is an escrow-like service, as local regulations don't allow it to operate its PayPal global digital payments platform in the country.
The company is also trying to get small businessmen such as jewelers and handicraft-makers to use its platform for exports, putting it in direct competition with Alibaba.com.
Ebay was among the first entrants into India's e-commerce segment, acquiring local e-commerce site Baazee.com in 2004 and launching local operations in 2005. It now has over three million registered users for its trading platform.
Amazon.com Inc. entered India last month with the launch of its price-comparison platform Junglee.com. Chinese business-to-business e-commerce company Alibaba.com Ltd. and U.S.-based daily deals operator Groupon Inc. are also fighting it out here.
Competition from Amazon is expected to heat up when foreign multi-brand retailers are allowed to sell directly to Indian consumers--which local laws currently don't permit.
According to online measurement firm ComScore, eBay topped the ranking of auction sites in India in February.
In an effort to keep the lead, eBay India--which offers applications that allow shopping over mobile phone platforms like the iPhone, Android and Windows--is investing in improving its services, Mr. Muralikrishnan said.
Mr. Muralikrishnan added that, despite the Indian market opportunity, not every e-commerce business model would succeed, noting that the current crop of niche online players and some daily deals operators are especially vulnerable.
Consolidation is already underway in the industry, with Flipkart acquiring another startup, Letsbuy.com, last month.
Ebay itself has received feelers from "quite a few players" that need capital to grow, Mr. Muralikrishnan said.
While eBay is not looking at an immediate acquisition, it continues to "evaluate opportunities," he added.
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