Can A Diversified Product Portfolio Help eBay’s Growth In India?

August 1st, 2016 by Trefis Team
-6.04%
Downside
51.98
Market
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Recently, eBay‘s (NASDAQ:EBAY) management stated, that through its efforts to diversify its product range, the company has achieved over 100 million live product listings on its Indian website eBay.in. This is a significant number given the India’s leading e-commerce player Flipkart has around 40 million product listings and Amazon lists over 65 million products. E-commerce players vying to capture a share of the growing Indian e-commerce market, with Amazon investing hugely in the region and  Alibaba looking to enter India.   eBay appears to be banking on its diverse inventory to attract consumers. Despite an early mover advantage, eBay is witnessing a slow-down in revenue growth in India and the company now appears to be looking at ways to grow its market share in the region. As eBay works on a turnaround program, India can play an important role in driving revenues for the company.  However, the company needs more than a diverse product listing to gain market share. eBay needs to rebuild its brand in the Indian e-commerce market and highlight factors that differentiate it from the other players in the region. For success, the company must also resolving key operational issues, including faster deliveries and refunds for buyers and a support system for sellers.

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Resolving Operational Issues Critical For Success In India

While eBay had the first mover’s advantage in India, it could started losing to new entrants in the market primarily due to several operational issues faced by buyers and sellers. Complaints centered on counterfit merchandise, delayed deliveries and refunds on returns, and the lack of a support system for sellers. eBay is currently working towards resolving these issues and making its platform better for both buyers and sellers.  We believe this is a critical step before the company can create a competitive edge. Currently, the Indian e-commerce market is dominated by three players who command more than 90% share in this market — Flipkart, Snapdeal and Amazon. Furthermore, two product segments (viz., electronics and appliances and fashion products) dominate nearly 80% of this market.

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While consumers looking for specific products which are not available on other e-commerce websites can land on eBay’s platform an enhanced user experience will ensure that the company is able to retain these users and grow them in future. Indian e-commerce market has a huge growth potential and it can it can drive user growth for the company

We believe eBay is working towards re- establishing itself in India and has taken a series of measures towards this goal. The company is working towards making its platform better for both buyers and sellers.  It also is working to resolve issues such as delayed deliveries and refunds, bad customer service and seller support and remittance issues. We believe that,  while a diverse product portfolio can help the company in the long term, addressing operational issues are critical for eBay to restart its growth in India.

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