Aggressive Sales by Amazon and Flipkart push back eBay

eBay IndiaeBay India, one of the earliest online marketplaces in the country, has slipped behind both Flipkart and Amazon on revenues from seller commissions as its two rivals along with Snapdeal have been aggressively pushing sales with big discounting events and high-decibel marketing.

eBay India posted revenues or income of Rs 107 crore calculated on commission earned from sellers along with advertising revenues for fiscal 2013-14, according to its annual filing to the Registrar of Companies.

In comparison, Amazon Seller Services posted revenues of Rs 169 crore and Flipkart Internet that manages the portal reported income of Rs 179 crore. A year earlier, eBay’s revenue was Rs 81 crore while Flipkart trailed with Rs 15.4 crore.

These numbers are not sales from actual goods sold on their portals but are transaction and listing fees from the sellers as well as advertising revenue which is the actual revenue of e- commerce sites. eBay declined to comment on its financials.

While eBay and Amazon don’t disclose income from merchandise sales, Flipkart India, the website’s wholesale arm, said sales more than doubled to Rs 2,846 crore in the year ended March 2014, against Rs 1,180 crore in the previous year.

Experts feel that the aggressive strategy of Flipkart, Snapdeal and Amazon has affected most others including eBay.

“These three companies are playing a game for market dominance and their aggressive stance has taken options away from rivals,” Mr. Devangshu Dutta, CEO at retail consultancy Third Eyesight, said.

“These Indian players (Flipkart and Snapdeal) are funded well to continue that strategy while Amazon seems to have clearly seen a huge opportunity in India,” he added.

In July, Amazon announced it would invest $2 billion (approx Rs 12,400 crore) in the company’s India operations that have exceeded gross merchandise sales of more than $1 billion within a year of the launch.

The Indian e-commerce industry picked up in a big way in the last couple of years, triggered by deep discounting strategy from newer players even if that meant incurring heavy losses.

Experts, however, are not discounting eBay India yet and feel the Indian online retail market, which is estimated to grow over four-fold to touch $14.5 billion (over Rs 88,000 crore) by 2018 can absorb a handful of large players including eBay.

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