eBay Inc. EBAYannounced plans to sell its stake in the Indian e-commerce giant, Flipkart to Walmart WMTto relaunch eBay India. The move will bolster eBay’s presence in India.
Last year, eBay invested $500 million in Flipkart to acquire 5.4% stake in Flipkart by vending its Indian division.
eBay had licensed Flipkart to use its brand name.
The latest decision comes following Walmart’s announcement of acquiring a majority stake in Flipkart.
eBay India aims to start cross-border trade in India via its online platform which will benefit both Indian sellers and buyers. Indian sellers will be able to sell their products to foreign customers, thus providing a global market to these merchants. Also, Indian customers will be able to purchase products of their choice from foreign merchants.
We believe the latest move will boost eBay’s customer and merchant base, given the growing e-commerce market. This will benefit the top-line growth of the company.
Coming to the price performance, shares of eBay have returned 13% over a year, underperforming the industry’s rally of 48.6%.