Saturday 20 July 2019

eBay returns to India with 5.5% Paytm Mall stake

Ebay has picked up a 5.5% stake in Paytm Mall, as the San Jose-based online marketplace makes another attempt to get a slice of the Indian e-commerce market.

Ebay said its global inventory will be available to over 130 million active users on Paytm Mall and Paytm’s app ecosystem as part of the deal. The companies did not disclose the investment amount, but sources close to the transaction said the financing round is about $150 million. ET had reported the eBay funding in its April 22 edition.

Ebay’s investment comes at a time when Paytm Mall’s business has undergone significant restructuring, with the company moving away from a discounting and cash backled strategy to following an online-tooffline (O2O) model.

In January, Paytm Mall shut its national e-commerce shipping business, which involved onboarding sellers and shipping products across the country. “This investment is a clear testament of our turnaround, and the shopkeeper commerce model (O2O) being validated by a new set of investors,” Vijay Shekhar Sharma, founder of Paytm, told ET.

EBay’s catalogue integration is estimated to be complete in the next couple of months. It has taken a board observer seat in the company.

“This deal will also allow shopkeepers on our platform to source over a million unique international products from eBay’s global base,” Sharma said.

Sharma said cross border business will account for about 10-15% of Paytm Mall’s overall sales in the next one year. “This new relationship will accelerate our crossborder trade efforts in a rapidly growing market, providing Paytm and Paytm Mall customers access to eBay’s selection,” said Jooman Park, eBay senior vice-president, Apac.

EBay will, however, continue to operate its e-commerce portal in India. Paytm Mall is eBay’s third investment in India after Snapdeal and Flipkart, both of which the company exited. The online marketplace has struggled to build a large presence in India on its own and has chosen to make investments in homegrown e-commerce companies to drive adoption. “India is too large a market for any e-commerce player globally to miss, and there are very few players today at scale to bet on in the current market,” said an investor requesting anonymity.

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