Article

Disha Kakkad
Disha Kakkad 20 April 2017
Categories Ecommerce

Will Flipkart Succeed in Beating Ecommerce Giant Amazon Through its eBay Deal?

The latest funding round by Flipkart is a clear signal of collective efforts to fight against e-commerce giant Amazon. But the question that arises is will Flipkart succeed in beating Amazon through fund raising and its deal with eBay India?

India’s largest eCommerce player Flipkart in its funding round has raised $1.4 billion from Tencent Holdings, Microsoft Corp, and eBay Inc., along with merging eBay’s India business with itself. eBay has also entered in an agreement with Flipkart wherein eBay merchants out of India can sell to Flipkart shoppers and Flipkart sellers can sell to eBay shoppers out of India.  With the deal, eBay expects to reach more consumers around the world.

Flipkart is also believed to have been in talks to buy out Snapdeal that has SoftBank as a prominent shareholder. If the deal materializes, it would be the biggest acquisition in the Indian e-commerce industry.

The latest funding round by Flipkart is a clear signal of collective efforts to fight against e-commerce giant Amazon. But the question that arises is will Flipkart succeed in beating Amazon through fund raising and its deal with eBay India?

One argument is that by buying other e-commerce businesses, Flipkart will acquire such scale that it will either be able to survive stand-alone or make either Amazon or Alibaba to buy it. It also holds true that by acquiring other rivals, Flipkart can present itself as the only alternative to Amazon to investors and customers.

Experts also say that Flipkart is trying to beat Amazon on the wrong parameters. It is possible to out compete Amazon by delivering an amazing user experience through a good combination of convenience, selection, pricing and availability. E-commerce players like Flipkart and Snapdeal till now haven’t been able to outcompete Amazon in the user experience front, it is thus dicey whether Flipkart will be able to succeed in beating Amazon by raising money. 

By merging with Snapdeal too, Flipkart will not be able to gain strength in its fight against Amazon because they will still be behind the overall user experience according to experts.

Flipkart is however positive about its fund raising and believes that it has provided solid growth capital that will help the company to extend its lead in Indian e-commerce market. The partnership will enable Flipkart to collaborate with eBay on cross-border trade and help the company deliver more options to choose from, to customers for international products.

Hopefully, with the funding and expertise the company has, it will be able to establish itself as a true market leader from both the technology and operational perspectives!
 

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