In yet another instance of consolidation in the retail e-commerce industry, it has been reported that Flipkart is in talks to acquire eBay India. This will come as part of the latest funding round of Flipkart, valued at $1 billion. The talks are currently in advanced stages and there can be two scenarios, one can be acquisition whereas the other option could be a merger. The feasibility, applicability and business value of both the options are currently being evaluated and the final decision will be taken based on a comparative study.
It may be recalled that eBay had entered the Indian market in 2004. At that time, it had the first mover advantage in the Indian e-commerce market. However, later it had to face tough competition from homegrown e-commerce startups such as Flipkart and Snapdeal. eBay once held a 6% stake in Snapdeal, but now it has come down significantly. The latest round of funding for Flipkart was led by Microsoft, EBay Inc. and Tencent Holdings Ltd. Flipkart is looking to raise more funds in the next few months.