eBay bets on India talent for global products

After selling its local business unit to India’s largest e-commerce marketplace, Flipkart, eBay continues to bet on India for talent to build products and solutions for its global operations.

The US-based online commerce major has set up in India an entity called ES Online, to which the software development business of eBay India will be transferred. “The software development business of eBay India (including the SEZ units) would be transferred to ES Online (a new Indian entity set up by eBay Group) on going concern basis under a slump sale agreement along with all the assets and liabilities related to the SEZ unit,” the Board of Approval for SEZs, which met on July 3 and approved the move, said in a note.

eBay, the peer-to-peer marketplace, had announced the sale of its India unit to Flipkart in April, alongside an investment of $500 million in the Indian e-commerce firm, after it failed to make a mark.

While being among the first entrants into India’s e-commerce space in 2004, eBay lost out to rivals Flipkart, Amazon, and Snapdeal, even as the market in the country grew exponentially.

Last year, the Indian e-commerce market stood at $17 billion and is projected to see double-digit growth for the next 10 years. At the time of announcement of the sale, it was expected that eBay’s India unit would see mass layoffs as several positions would become redundant. While that might still be the case on the business side, it seems that the eBay group is keen on retaining technology talent that supports IT functions of its platform.

India is the global software outsourcing hub, with several large tech companies such as Google, Microsoft, and Facebook utilising local talent to help build global products.

Amazon, which has become India’s second-largest e-commerce player, began in India by setting up units to build products and provide technology support to its global businesses. The local technology arm helped it to understand the Indian market and incubate its business to emerge as a challenger to Flipkart in a few years.

As e-commerce companies look at reaching out to more consumers globally and make them buy goods regularly on their platform, firms such as eBay need to build analytics products that help them derive insights from the data that consumers leave on their platform. As they deal with consumer data, critical to their business, companies such as eBay retain them within their centres than outsource to third party vendors.