wordpress blog stats
Connect with us

Hi, what are you looking for?

Why Investing In Snapdeal Doesn’t Make Sense For eBay

Online marketplace, eBay Inc, is in talks to pick up a significant stake in Indian e-commerce site, SnapDeal, according to a report by The Hindustan Times, citing a source as saying that the transaction is still being worked out and that it will likely be carried out through eBay India, and structured to comply with FDI (Foreign Direct Investment) regulations. Another report by The Times of India mentions that eBay might initially acquire only a 5% stake in the company, valuing Snapdeal at around $300 million. Note that both eBay and Snapdeal have refused to comment on the matter. Why would eBay invest in Snapdeal? Snapdeal pivoted from being a deals site to an online marketplace model, allowing sellers to offer products across categories such as electronics, fashion, lifestyle among others. This is similar to eBay's B2B model in India, and both companies essentially operate in the same segment. Why would eBay invest in a competing business, thereby helping it grow? If at all, an outright acquisition would make more sense: eBay would be better off acquiring SnapDeal for its users and vendors, shutting it down to eliminate competition, and shift users and vendors to the eBay marketplace. This is what Flipkart did with Letsbuy. If this investment does go through, it wouldn't make much sense to us. FDI in eCommerce a barrier? The Indian government does not allow FDI in multi-retail e-commerce, although it had approved FDI of upto 51% in multi brand physical retail, subject to certain conditions. The HT report categorically mentions…

Please subscribe/login to read the full story.
Written By

Free Reads

News

With GPS in every car, India's toll collection is going high-tech.

News

Google is currently undergoing the necessary procedures for the leasehold land, which is presently under the ownership of the Maharashtra Industrial Development Corporation.

News

The pilot project for which is being launched in 19 cities this year, with a plan to launch a full-fledged rollout next year.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

Views

News

NPCI CEO Dilip Asbe recently said that what is not written in regulations is a no-go for fintech entities. But following this advice could...

News

Notably, Indus Appstore will allow app developers to use third-party billing systems for in-app billing without having to pay any commission to Indus, a...

News

The existing commission-based model, which companies like Uber and Ola have used for a long time and still stick to, has received criticism from...

News

Factors like Indus not charging developers any commission for in-app payments and antitrust orders issued by India's competition regulator against Google could contribute to...

News

Is open-sourcing of AI, and the use cases that come with it, a good starting point to discuss the responsibility and liability of AI?...

You May Also Like

News

Google has released a Google Travel Trends Report which states that branded budget hotel search queries grew 179% year over year (YOY) in India, in...

Advert

135 job openings in over 60 companies are listed at our free Digital and Mobile Job Board: If you’re looking for a job, or...

News

By Aroon Deep and Aditya Chunduru You’re reading it here first: Twitter has complied with government requests to censor 52 tweets that mostly criticised...

News

Rajesh Kumar* doesn’t have many enemies in life. But, Uber, for which he drives a cab everyday, is starting to look like one, he...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Name:*
Your email address:*
*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ