It seems like eBay is bringing onboard popular offline brands and retailers and becoming a facilitator for their online sales, according to a report from The Economic Times. The company has signed up offline merchants like Fabindia, Bata, Catwalk and Hidesign in the last few weeks to improve its lifestyle offering and hopes to triple its sales figures in this lifestyle space.
According to the report, eBay India’s Country Manager, B Muralikrishnan stated that setting up fulfillment centres and holding inventory impacts the company’s gross margins negatively and thereby prevents fast scaling. Hence, unlike other e-commerce partners they prefer partnering with allied service providers and courier service providers to manage out their business. So how are these brands managing online sales?
– On change in strategy to bring in offline brands: In a brief conversation with MediaNama, Abhimanyu Lal, Head Category Management – eBay India, denied any changes to the company’s existing strategy. eBay had primarily started as a person to person collectible trading marketplace, however as e-commerce became more mainstream in India, bigger brands and retailers partnered with eBay to sell their products on the latter’s portal, so as to create an additional revenue channel. So apparently, it looks like the offline brands looked at it as an opportunity, and joined eBay which benefitted from the expansion in its lifestyle product offering, without worrying about warehousing.
When asked if there has been a sudden focus to beef up their lifestyle offerings, Abhimanyu said that they have historically been very strong in this segment but as the markets mature, they expect this segment to do well.
– On building warehouses: When queried about how eBay ensures the proper delivery of goods if it doesn’t intend to build warehouses or fulfillment centers in the country, he said that eBay’s role is to provide a platform so that sellers can retail their products and bring the buyer to the product, whereas it’s the seller’s duty to possess the inventory and fulfill the transaction. However, he added that they do engage with couriers and logistic companies on behalf of sellers, so that retailers get a better deal. Bigger brands and retailers however take care of the logistics of their own goods. He reiterated that eBay will not be building warehouses or fulfillment centres in the country, since it doesn’t see the need for it in the current scenario.
– Transactions & Active Users: eBay claims that it currently has four million monthly unique visitors and sells six products every minute, although it refused to share the exact transaction numbers. Metro cities contribute around 51% to the company’s transactions while Tier 2 and 3 cities contribute about 40% of transactions with customers from rural India contributing to the rest 9% of the transactions.
– Segments: Abhimanyu added that the technology segment (which includes electronic goods like mobile phones, computers, home appliances, audio devices and many more) followed by lifestyle (which includes apparel, shoes, personal accessories, home, decor, furnishing and many more), collectibles and media (books, films and music) were the top segments on the portal.
– Plans for digital: On being asked if the company has planned to do anything in the digital space, he said that there was nothing concrete yet since it is not currently a focus area for eBay, however as a global company it intends to have a foothold in that segment.