As Walmart completes its due diligence on the Indian ecommerce unicorn, the Flipkart camp might have begun with the further steps. However, the deal can still be interrupted as eBay might come as a hurdle.
In a report, Recode highlighted that if Walmart wants to do much business with Flipkart, it will have to first work out a deal with eBay, which had invested $500 Mn in Flipkart in October 2017. At the time, eBay had taken a 5.44% stake in the business and handed over eBay India operations to Flipkart.
Most importantly, eBay also signed a four-year exclusive “commercial arrangement designed to give merchants who sell on Flipkart access to more than 150 Mn new customers from eBay around the globe.”
The deal aimed to provide eBay sellers outside of India with access to a new group of consumers inside of that country. At the time, eBay CEO Devin Wenig had said that this was the part of the deal he was “most enthusiastic about.”
Therefore, the trouble brews in the light that the agreement still has three years to go and includes all types of merchandise except grocery items.
eBay And The Trouble In Flipkart-Walmart Deal
Adding to the trouble is the point that “eBay also has the right to take back control of the eBay India brand name should Flipkart get acquired,” the report quoted one person familiar with the development.