eBay India's sales jump, so do losses

By

Maverick Martins

Published
Dec 27, 2016

eBay India posted a three-fold jump in sales in 2015-16, however its losses widened to Rs 262 crore in FY16 from Rs 172 crore a year ago despite various cost cutting initiatives, according to an Economic Times report.

The company posted revenue or income of Rs392 crore for the fiscal 2015-16, according to its annual filing to the Registrar of Companies. Its revenue stood at `132 crore in the previous fiscal.

In comparison, Amazon Seller Services' turnover for the previous fiscal rose 116% to Rs 2,217 crore, while Flipkart Internet's sales increased 153% to Rs1,952 crore during the same period.

These numbers are not earnings from actual goods sold on their portals, but transaction and listing fees from sellers and advertising revenue, which form an e-commerce site's actual income. E-commerce firms charge sellers anything between 5% and 20% of the value of goods as commission.

San Jose-based eBay bought local auction platform baazee.com for $55 million (about Rs344 crore) to enter India in 2004, at a time when online retail was unheard of.

The company, however, lost its early mover advantage in India to rivals Flipkart, Snapdeal and Amazon as these players took to investing heavily in customer acquisition by offering deep discounts.

Last month alone, Amazon invested Rs2,010 crore in its Indian unit, taking the company's total investment in Amazon Seller Services to Rs11,638 crore.