Sorry, Snapdeal. eBay’s In It To Win It
It could be a good decision for Snapdeal to merge into Flipkart, says eBay CEO Wenig.
eBay Inc.'s decision to sell its Indian marketplace to Flipkart despite owning a stake in its rival Snapdeal was solely out of one reason – the e-commerce giant is in the market to win and Flipkart is more aligned to that vision.
The irrational and over-invested e-commerce industry in India is likely to see a lot of consolidations, said Devin Wenig, chief executive officer of the global e-commerce marketplace, in an interview to Recode. He realised that eBay cannot grow in India organically, and wants to partner with “those that are going to win”.
We still own five percent of Snapdeal and it’s not like we’re giving up on them. But if I want to be in a market, I want to win.David Wenig, Chief Executive Officer, eBay
The collaboration between eBay and Flipkart is expected to give the Indian unicorn the boost it needs to compete with Amazon.com Inc.
Former eBay executive Kalyan Krishnamurthy took over as Flipkart’s chief executive officer to oversee its operations during the year-end season sale. As a result, Flipkart managed to beat Amazon by a narrow margin during the season.
Snapdeal, which was valued at $6.5 billion in February 2016, has struggled to keep up with its larger rivals. The company has been shutting down divisions and letting go of workforce to cut its losses which doubled by the end of March 2016, according to documents filed with the Registrar of Companies.
Speaking about rumours that Snapdeal may be taken over by Flipkart, Wenig said that it was a decision that could make sense. However, he clarified that being a minority owner of a 5 percent stake in Snapdeal, he was not a part of “that table”.