#Bazee.com

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The Bazee.com Legal Battle: Intermediary Liability, Online Platforms, and Free Speech

The Bazee.com Controversy: Avnish Bajaj’s Arrest and the Freedom of Online Marketplaces In the early 2000s, the world witnessed the rapid growth of e-commerce and online marketplaces. One such platform, Bazee.com, later known as eBay.in, became a household name in India. However, the company and its CEO, Avnish Bajaj, found themselves embroiled in a highly controversial legal battle that raised…

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How has e-commerce business evolved in India?

Introduction – E-Commerce Business

The evolution of e-commerce business in India has been nothing short of a revolutionary journey. The 21st century has witnessed a digital revolution that has significantly transformed the way business operates and consumers shop. The buying and selling of goods and services online has emerged as a prominent force in the global economy. In India, the journey of e-commerce has been particularly remarkable, marked by exponential growth, technological advancement, policy changes, and changing consumer behaviors.  I will explain more about the evolution of e-commerce in India, spanning from its inception to its current state, exploring the key milestones, challenges, and prospects.

Origin and Early Beginning – E-Commerce Business

 

The beginning of e-commerce in India was in late 1990 and early 2000 propelled by growing internet penetration and technological advancement. Initially, in first wave of e-commerce was marked by the establishment of online marketplaces, mainly selling books, electronics, and other consumer goods.  Companies like Rediff and Indiamart started selling online their products mainly business-to-business (B2B). IndiaPlaza and Rediff shopping was there for end users. eBay joined later after acquiring Bazee.com and it was consumer to consumer (C2C) selling website.

However, these platforms faced many challenges limited internet access, lack of trust in online transactions, lack of awareness, payment gateway issues, logistic hurdles, and infrastructure issues.  People used to purchase from stores due to a lack of trust in online transactions.

The Growth Phase and the evolution of models – E-Commerce Business

 

The e-commerce business was a new business model emerging in India. Initially, all selling companies had their focus on B2B but very soon this business model started gaining popularity in business to consumers (B2C) or end users. The turning point of e-commerce in India was in early 2000 with the establishment of Flipkart. Sachin Bansal and Binny Bansal started Flipkart in a small apartment in 2007 as an online bookstore. Flipkart was an online bookstore before expanding to an online marketplace.

Flipkart started the Cash on Delivery payment model which was a huge success and helped to build trust among consumers who were reluctant to use their Devit or Credit card to make the payment. This marked the beginning of a new era of e-commerce in India. Later on, other players like Snapdeal, and Paytm Mall also entered to make the market more competitive and give more offerings to customers.

Infrastructural Challenges and the Mobile Revolution – E-Commerce Business

 

In the early days, one of the significant challenges faced was inadequate infrastructure, including limited Internet connectivity and payment gateways. However, the proliferation of smartphones and the subsequent mobile Internet boon in the 2010s acted as a catalyst for -commerce growth.  Companies capitalized on this by developing mobile apps and responsive websites, making shopping accessible to a larger population.

This shift in consumer behavior led to a surge in mobile app-based shopping and paved the way for various business models, including food delivery, ride-hailing, and hyper-local services.

Government Initiative and Policy Changes – E-Commerce Business

The Indian government also played a significant role in shaping the e-commerce business. The introduction of Goods and Services Tax (GST) in 2017 streamlined taxation and logistics, making cross-state of goods more efficient. However, the government also introduced policies to ensure a level playing field between online and offline retailers, which led to certain regulatory challenges for e-commerce giants.

The Indian government played a crucial role in shaping the e-commerce ecosystem through policy changes and regulations. The introduction of FDI (Foreign Direct Investment) regulations in e-commerce brought about significant shifts in how online retail operated. These regulations aimed to balance the interests of online and offline retailers and ensure fair competition.

In 2018, the government implemented new e-commerce regulations that restricted the sale of products through entities in which e-commerce platforms had equity stakes and prohibited exclusive deals. These changes aimed to prevent unfair competition and promote fair trade practices. While these regulations posed challenges, they also pushed e-commerce companies to innovate and adapt to the evolving regulatory environment. Further information can be accessed using below link:

Funding and Investments – E-Commerce Business

 

The growth of e-commerce in India was fueled by substantial investments from both domestic and international investors. Companies like Flipkart and Paytm Mall secured significant funding rounds, enabling them to expand their operations, build robust technology infrastructure, and offer a wide range of products and services. These investments not only supported the growth of e-commerce platforms but also fostered the development of the supporting ecosystem, including payment gateways, logistics, and technology services. . The success of Flipkart drew the attention of global players like Amazon, which entered the Indian market in 2013. This influx of funds not only fueled the expansion of existing players but also led to the emergence of various niche e-commerce platforms, catering to specific product categories.

Challenges and Evolution in e-commerce

Despite its rapid growth, the e-commerce sector in India faced several challenges. These included:

Changes in Consumer Dynamics

The changing demographics and increasing disposable incomes contributed to the growth of e-commerce. Additionally, the convenience of shopping from home, access to a vast array of products, and the availability of reviews and ratings influenced consumer preferences. Social media also played a role in shaping purchasing decisions, as consumers often relied on peer recommendations and influencer endorsements.

Logistics and Infrastructure

Logistical challenges posed a significant hurdle for e-commerce companies. However, innovative solutions emerged, including third-party logistics providers and technology-driven solutions for efficient last-mile delivery. Companies started investing in warehouses and fulfillment centers to ensure faster and reliable delivery of products.

The Rise of M-commerce and Digital Payments

Mobile commerce (m-commerce) gained immense traction as smartphones became more affordable and accessible. Digital payment solutions, such as mobile wallets and UPI (Unified Payments Interface), revolutionized the way transactions were conducted. This shift towards digital payments not only enhanced the shopping experience but also facilitated the growth of online transactions.

Counterfeit Products and Trust

The prevalence of counterfeit products on online platforms raised concerns among consumers about product authenticity and quality.

Data Privacy and Security

As online transactions increased, ensuring the security and privacy of customer data became crucial to building trust in the e-commerce ecosystem.

Competition and Profitability

Intense competition led to price wars and heavy discounts, making it challenging for e-commerce platforms to achieve profitability. Additionally, maintaining customer loyalty in a crowded market became an ongoing concern.

Innovations and Technologies in E-commerce Business

Artificial intelligence (AI), machine learning (ML), and data analytics play a crucial role in enhancing customer experiences. Personalized recommendations, virtual trial rooms for fashion, and chatbots for customer support became common features. Delivery mechanisms evolved with the experimentation of drones and autonomous vehicles.

Impact on Traditional Retail

The rise of e-commerce brought about a paradigm shift in consumer behavior. Traditional brick-and-mortar retailers faced challenges as consumers gravitated towards the convenience and variety offered by online platforms. Many retailers adapted by establishing their online presence, embracing an omnichannel approach.

Challenges and Future Outlook

While the journey of e-commerce business in India has been transformative, several challenges persist. These include intense competition, profitability concerns, regulatory complexities, and the need to establish sustainable business models. However, the future outlook remains promising. The growth of Tier 2 and Tier 3 cities, advancements in technologies like AI and AR, and the push towards digitization by the government all point towards a bright future for e-commerce in India.

In response to these challenges, e-commerce companies adopted innovative strategies. They focused on enhancing customer experience, expanding product categories, investing in technology-driven solutions, and collaborating with traditional retailers to create omnichannel experiences.

The future of e-commerce business in India appears promising, driven by factors such as increasing internet penetration, digital literacy, and the growing acceptance of online transactions. The rise of direct-to-consumer (DTC) brands, the integration of augmented reality (AR) for immersive shopping experiences, and the expansion of rural markets are expected trends.

Impact of COVID-19 on e-Commerce Business

The COVID-19 pandemic acted as a catalyst for the e-commerce business in India. Lockdowns and movement restrictions led to a surge in online shopping, as consumers turned to e-commerce platforms for their essential and non-essential needs. This period highlighted the resilience of the e-commerce ecosystem and the industry’s ability to adapt to challenging circumstances.

Conclusion – E-commerce Business

The journey of e-commerce business in India has been a transformative odyssey, marked by remarkable growth, innovation, and challenges. From its modest beginnings in the late 1990s to becoming a thriving ecosystem that impacts millions of lives. E-commerce has redefined the retail landscape. As India continues to embrace digital transformation and connectivity. The e-commerce sector is poised to reshape commerce, consumption, and economic opportunities for years to come. However, realizing this potential will require a concerted effort from stakeholders. This also includes businesses, government bodies, technology providers, and consumers, to address challenges and unlock the full promise of e-commerce in India’s dynamic economy.

The evolution of e-commerce business in India is a testament to the power of technology, innovation, and adaptability. From its humble beginnings as online directories to becoming a multi-billion-dollar industry. The journey of e-commerce in India has been marked by perseverance, creativity, and resilience. As technology continues to evolve and consumer behaviors shift.  E-commerce is poised to play an even more integral role in shaping the Indian retail landscape.

Digital Marketing Services , SEO and E-Commerce Solutions in Delhi, India

Author – Farhanul Haque

This article is written by the Founder of Digitamizer who has been working in the e-Commerce Sector Since 2006 and is also a certified Digital Marketing Professional from IIT, Delhi, India.

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Closure of Bazee.com case: Sharat Digumati gets relief amidst Intriguing precedents created

Closure of Bazee.com case: Sharat Digumati gets relief amidst Intriguing precedents created

The Bazee.com case which was one of the earliest criminal prosecutions to be launched under Information Technology Act 2000 appears to have finally completed its journey with the quashing of criminal prosecution against Mr Sharat Babu Digumati. This case was filed in 2004 and lingered on in different courts until this current judgement on December 2016 seems to have brought a closure.

For some…

[fluidscapes]

The Internet brought in a new period to rewrite the history of the world with its colossal effects on human lives and all other aspects, so much so that the proliferation of the Internet has become a new yardstick for growth and development.

Although started relatively late, India has become the third largest Internet user base in the world. This is a significant achievement that has opened the floodgate for e-commerce and other forms of digital marketing practices to achieve fast-track prosperity for the country.

Digital marketing, also known as Internet marketing, is the lifeline of modern business and by all indications, will remain so in the future as well. Seeing the immense power of digital marketing channels like search engines, social media, etc. all traditional marketing methods are changing to digital either completely or partially to have a much higher reach, and to become more efficient and economical. Even our cable and satellite TVs are also changing fast to Internet TV aka OTT, making TV advertising a form of digital marketing only.

Currently, India is a stable economy with a confident business class and a growing number of startup unicorns. The country is witnessing great enthusiasm and entrepreneurial drive among the youngsters. New ideas and products are shaping up, breaking many barriers. Without the surge of the Internet and digital marketing, this air of confidence would never be possible. But where did it all begin? How did the evolution of digital marketing take shape?

The phrase “digital marketing” came to our attention in 1990 for the first time following the introduction of the internet and the Web 1.0 platform. The Web 1.0 platform allowed users to search and read information, but it did not allow them to distribute it across the internet. Marketers all around the world were still apprehensive about the digital platform during that time. They weren’t sure if their plans would work because the internet hadn’t been widely adopted yet.

The first clickable banner was launched in 1993, initiating the start of the digital marketing era and ushering in new technologies to enrich the digital marketplace. In 1994, Yahoo was founded.

The Indian Digital Marketing story

The Internet services launched in India on August 15, 1995, by the VSNL. It didn’t take long for the Indian business community to explore the potential of Internet marketing in India. The very next year i.e.1996 saw the launch of IndiaMart B2B marketplace, and with that started the history of digital marketing in India.

In the midst of this dot-com hysteria we saw the birth of Google search engine in 1998, which many experts consider as the prime mover of digital marketing. Yahoo web search and MSN from Microsoft also appeared around the same time. Two years later, the dot-com bubble burst, crashing the stock market and pulling the stock values of most of the dot-com entities to the ground. All the smaller search engines shut shop, leaving behind a vacuum only to be filled by the giant companies.

The dot-com bubble burst created a long term down turn of confidence of the people on the Internet based commerce. Like in other countries, it caused fear and scepticism among common people in India about e-commerce. Although, Amazon.com started its operation in India in 2013 as an online store for books, movies, etc. and Bazee.com (later acquired by ebay.com), Indiatimes.com, Yahoo, Rediff, Sify and a few others had taken cautious steps into online shopping, it wasn’t before 2007 that the whole of India got a taste of e-commerce when Flipcart emerged with a bigbang to surprise India with wide varieties of products at the most competitive prices and rock solid software for hasslefree ordering and safe payment gateways.

As a result, there came a huge surge in the use of smartphones, online purchasing, at-home delivery, and online brand promotions, which experienced a steady growth over many years now. Numerous logistics companies came up to ensure credible supply-chains that saw exponential growth of e-commerce in the country.

Another thing that contributed to the growth of digital marketing significantly is the rapid increase in the digital payment gateways. There are multiple options of digital payment available with the people, which ensure that the majority of payment transactions are now done digitally.

Reposted from: fluidscapes.in Source Link:  History Of Digital Marketing In India

[loyallogic]

How far should the extent of safe harbour protection be to e-commerce platforms?

This article is written by Harshita Shah, pursuing a Diploma in Cyber Law, FinTech Regulations and Technology Contracts from LawSikho.com.

Introduction

E-commerce platforms first emerged in India in 1999 with fabmart.com, followed by bazee.com, however, only after the launch of 4G smartphones in 2012, e-commerce business flourished. It started growing largely after 2014. In 2017, Indian B to C e-commerce was valued at 38.5 billion and is estimated to rise to USD 200 billion in 2026. However, the regulatory framework around e-commerce trade is not well developed in India. Time and again e-commerce platforms have infringed trademark and other IPR rights of owners. They have also engaged in tampering, counterfeiting and falsifying products of well-established brands. Due to lack of understanding of how e-commerce websites operate, the extent of control of e-commerce companies on their websites, the extent of the relation between sellers on e-commerce platforms and e-commerce companies itself, it has led to weak establishment of the liability regime around e-commerce companies. Despite regulatory lacuna, jurisprudence around intermediary liability has been well developed. In this article an attempt is made to analyse the extent of safe harbour protection as decided by judicial interpretation in various case laws and the lacuna that current provisions around intermediary liability has.  

Judicial interpretations regarding intermediaries by Indian courts

“Amway India Enterprises PVT Ltd v/s 1Mg Technologies Pvt Ltd. & Another

The plaintiff Amway India Enterprises PVT Ltd filed suit against well-known e-commerce platform Amazon for selling Amway branded products on its website without Amway`s consent. Amway contended that Amazon was engaged in tampering, counterfeiting various products of Amway, and selling them on its website at a much cheaper price. Hence to bring this fact to the knowledge of Amazon, Amway wrote cease and desist letters to Amazon, clearly mentioning that the trademark and trade name were being used by it without Amway`s consent which constituted infringement to Amway`s intellectual property rights. The products were sold in violation of direct selling guidelines since Amway never gave consent to its sellers to sell products on any e-commerce platform. Usage of Amway logo, trademark, on Amazon website misleads consumers by portraying the connection between Amway and Amazon, thus creating a misleading representation that amazon was authorized to engage in the sale of Amway products. Amazon had refused to comply with the requisitions made by Amway on the grounds of being an intermediary that only facilitated transactions between buyers and sellers and that the direct sellers of Amway were under obligation to comply with the direct selling guidelines. The court ruled that e-commerce platforms are not entitled to the protection of a safe harbor provision under section 79 of the Information Technology Act because they were engaged in storing,  tampering and, counterfeiting of plaintiff`s products. The listings were also misleading as they use the Plaintiffs product images, marks, logos, names, etc. giving the impression that the products are sold by the Plaintiffs themselves. The consumer does not know that the seller is not authorized by the Plaintiffs to sell the said products. Thus, the plaintiff’s trademark rights were infringed. 

Amazon Sellers Services Private Limited v/s Amway India Enterprises PVT Ltd. & Others 

The decision in above judgment was reversed on appeal before 2 judge bench of Delhi High Court. The two bench judges parted with the findings of Single-judge bench in the original suit stating that the sale of the Plaintiffs’ products on e-commerce platforms doesn`t violate their trademark rights, or constitutes misrepresentation, neither it results in the dilution and tarnishing of the goodwill and reputation of the Plaintiffs’ brand as expressed by the single judge in terms of section 30 (3) r/w30 (4) of Trademark act. Amazon provides services in addition to access, and hence e-commerce platforms such as Amazon have to show compliance with Section 79 (2) (b) of the IT Act. In other words, they have to show that they (i) do not initiate the transmission (ii) do not select the receiver of the transmission and (iii) do not select or modify the information contained in the transmission. The case of these Defendants is as follows. Where there is a potential customer who is accessing the site, so long as it is he who clicks the button, it is the customer who is initiating the transmission. Amazon, Snapdeal, or Cloudtail does not select the receiver of the transmission, which is the buyer. They do not modify the information contained in the transmission, such as the choice of the product, the number of units, and so forth and hence they are entitled to safe harbor protection under IT act.    

Christian Louboutin Sas v/s Nakul Bajaj & Ors 

According to the court, the safe harbour protection under section 79 of the IT act would not be available to e-commerce platforms who knowingly allow storing of counterfeit products because that would constitute falsification of the mark. E-commerce websites who have the knowledge that the product is counterfeited, and still display and advertise the same on their websites are clearly giving the impression that the product is genuine. All this constitutes an active involvement in unlawful acts and hence bars them to claim as intermediaries.     

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Judicial interpretation of intermediaries by European court

 L’Oréal v. EBay 

In this case, L’Oréal brought four simultaneous lawsuits against eBay for trademark infringement, negligence, and violation of its selective distribution networks in France, Belgium, England, and Spain. Among other arguments, L’Oréal claimed that EBay, by failing to set up efficient measures and/or filtering tools to prevent the sale of counterfeit perfumes on its websites and by benefiting from these sales, was, directly and indirectly, liable for trademark infringement, unfair competition, and negligence under a general theory of tort. The Court ruled that eBay may not be exempt from liability since it plays an active role in the sale of goods by optimizing the presentation of the offers or promoting them. 

Are all e-commerce platforms passive intermediaries?

If intermediaries only transmit, host and retain electronic records without having a control to monitor or exercise due diligence, they can be classified as passive intermediaries. But e-commerce websites have greater control over their websites, they even monitor the list prices of sellers against prices found on the websites or offered by other sellers. In order to provide fulfillment services they have their own warehouses where they maintain inventory of sellers. They have their own return/refund policy. They are involved in the offering of services which are more than just an electronic record. They maintain the catalogues of products on the website and have all the sellers registered with them. E-commerce platforms are either actively involved or passively involved in providing services. Those acts which constitute passive involvement and active involvement must be identified. Subsequent active involvement shall be enough to bar them to claim as intermediaries. 

Do direct selling guidelines have the force of law?

The 2 bench judges in Amazon Sellers Services Private Limited v/s Amway India Enterprises PVT Ltd overlooked the fact that Amway is a direct selling entity and is governed by direct selling guidelines (DSGs). They ruled that direct selling guidelines have no force of law. However, where the issue involves a fundamental question regarding any wrong which, if not decided correctly, has the impact of undermining the public purpose for which such guidelines were issued, then such guidelines have the force of law. Also, the guidelines were not issued in isolation; they are issued under the Consumer Protection Act. As per clause 7 of DSGs any person who sells or offers for sale, including on an e-commerce platform any product or service of a direct selling entity must have the prior written consent of the direct selling entity to undertake such sale or offer such products for sale. As per the consumer protection act “person” includes any corporation, company or, the body of individuals whether incorporated or not. Thus, even Amazon is obliged to obtain consent from Amway. Therefore the judges have committed an error by giving no legal status to DSGs, which gives a liberty to e-commerce platforms to exploit direct selling entities and their IPR rights.  

Intermediary Guidelines, 2011

Clause 3 of Intermediary guidelines, 2011 obliges intermediaries to publish rules and regulations, terms and conditions or user agreement which shall inform the users of computer resource not to host, display, upload, modify, publish, transmit, update or share any information that infringes any patent, trademark, copyright or other proprietary rights. In the case of non-compliance by the users, the intermediary has the right to terminate the access of users to the computer source and remove the non-compliant information. Now, without performing the necessary due diligence to screen any such infringing element or implementing computer programs that screen for such non-compliant information, how can e-commerce platforms be given complete exemption from liability. In terms of Section 79 of the IT Act, it seems that the wordings of the provision are restricted to passive intermediaries so far as the availability of the safe harbor provisions is concerned. An intermediary shall not be liable for any third-party information, data or communication link made available or posted by it, as long as it complies with Sections 79 (2) or (3) of the IT Act. Even after serving notice, the respondents in Amway India Enterprises v/s 1Mg Technologies Pvt. Ltd. & another refused to take down the products listings. They failed to comply with intermediary guidelines, 2011 by not disabling such information within 36 hours which effectively bars them to the relief of safe harbour protection.  

US legislation

The US jurisprudence around intermediaries is developed before the internet era where intermediaries were held liable for their actions under tort law. However, even after the evolution of Digital Millennium Copyright Act, judicial pronouncements for determining liability of intermediaries based on tort law can be found. Under Tort law, Liability is mainly determined as vicarious Liability or contributory liability. Post technological advancements, US courts also evolved inducement theory in the Grokster case. Inducement theory is based on the intent of the defendant to promote the use of devices for copyright infringement. The US Digital Millennium Copyright Act`s title 2, Online Copyright Infringement Liability Limitation Act (OCILLA) is designed to protect service providers by creating four grounds of safe harbour protection and section 512(c) of the act makes intermediary liable for any infringing material if they receive financial benefit due to such infringing activity. This title gives rights to the copyright owners to obtain a subpoena from a federal court ordering service providers to disclose the identity of a subscriber who is engaged in infringing activity. This is a dual remedy which can help to take down the product listings and directly bring action against subscribers. 

Conclusion

E-commerce can seek shelter under Safe harbour provision as long as it remains a passive intermediary. Hence, in order to come to the conclusion whether e-commerce platforms are an active or passive intermediary is a work of fact finding and laying evidence. As defined in section 2 (w) of IT act an e-commerce platform today is not only engaged in storing, receiving, or transmitting any electronic record received from its user. It is actively engaged in the management of the website, operation of the business, functioning of the platform, etc. Hence, it is important to distinguish and break down different activities and services that e-commerce serves, to identify their passive involvement and active involvement. Recognising the growth of e-commerce, a draft of amendment to Intermediary guidelines, 2018 and Draft of National e-commerce policy is expected to fill the lacunas around the regulatory regime. The draft policy gives trademark owners including licensees of trademark, the right to directly register themselves with e-commerce companies so that when the products are uploaded for sale, the platforms can directly inform the trademark owners. E-commerce platforms cannot list products of TM owners without their permission. Thus, a strong regulatory regime can help to keep a check on flourishing e-commerce business. 

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eBay India : The Pinnacle and Plummet of a Marketplace Titan

 Why did eBay India encounter setbacks? Know the top reasons for eBay’s failure in India

Brief Introduction of eBay.com – From Auctionweb to eBay.com

eBay.com, one of the largest and most popular marketplaces, was founded in September 1985 by Pierre Omidyar and named “Auctionweb”. The platform started a way for individuals to buy and sell collectible items. But they very soon added more categories to their list. Over the years, eBay has gone through numerous transformations faced many challenges, and adapted to the marketing dynamics. The first item ever sold on the platform was a broken laser pointer, which fetched an unexpectedly high price. Ebay India was India’s division which was the early days online marketplace in India.

AuctionWeb – Introduction

Auctionweb was a personal project of Pierre Omidyar to buy and sell items at auction in an online format. The company changed its name to eBay officially in 1997. EBay’s name was derived from Pierre Omidyar‘s consulting firm name “echo-bay”.  In the year 1998, eBay introduced its first logo. EBay went to the public to raise capital and establish themselves in the mainstream business world. The initial public offering (IPO) was a resounding success, contributing to the rapid growth of the platform. As eBay’s reach extended globally, it acquired international marketplaces. Such as the acquisition of iBazar in 2001, strengthening their position in Europe.

In 2002, eBay made a good strategic acquisition by purchasing PayPal. A move that made the future of online payments in a smooth shape. The integration of PayPal into the eBay platform streamlines transactions and increases user trust. The synergy between eBay and PayPal led to substantial growth in both entities.

eBay – Continuous Journey

The company continuously innovated to enhance the user experience. The introduction of the “Buy It Now” feature in the year 2000 allowed sellers to list items at fixed prices. It allowed the buyer to purchase the item immediately. The introduction of eBay stores in the year 2001 provided sellers with personalized virtual storefronts, enhancing their visibility and branding.

As the organization solidifies its position as a leading online marketplace, it also faces challenges. The emergence of competitors like Amazon and the proliferation of counterfeit goods on the platform posed threats. eBay responded by implementing more stringent quality control, buyer protection programs, and enhanced seller performance standards.

eBay embraced the mobile revolution, launching its mobile app in 2008. The app empowered users to browse, bid, and sell the items on the go, changing the way people engaged with the platform. This marked the beginning of eBay’s digital transformation journey, which included user interface enhancements, personalized recommendations, and AI-driven search algorithms.

INTRODUCTION OF EBAY INDIA

eBay India, an e-commerce giant, entered India by acquiring Bazee.com for $50 million in 2004 and started selling products on its portal. This move was very strategic as they got a very big customer base in an emerging market as internet users were small in numbers and getting up day by day and this online business started becoming popular. Being an early mover, they have a large customer base with fewer competitors. At that time, there were several methods for buying a product online and one of the popular options was auction.

A buyer can bid according to the auction base price and can get the products at the lowest price. If there is no bidder or fewer bidders, the price does not go up. This was a unique and interesting way to buy antique products, like postal stamps and coins and some antique items. I used to purchase items that I could not find on the market easily.

Continuous Journey – Ebay India

However, they offer collectibles, handicrafts, fashions, and electronics. Some other popular portals like Rediff.com and Indiatimes.com were the competitors of eBay India. Some of the sellers, mainly from the electronic electronics category, were used to selling items on eBay India at that time, as this was the peak of businesses who were selling mobile phone accessories and getting more business from this website, Smartphones were introduced and started being sold in India and buyers started buying accessories for their phones.

The platform was user-friendly and methods were very secure. However, not every credit or debit card holder wants to purchase online. This was one of the bigger challenges. In 2014, eBay introduced a cash-on-delivery payment mode. Before 2014, only a prepaid method was available to purchase the item. It was a C2C portal and encouraged consumers to sell their products on the website. To sell on a website, it is not necessary to have a registered business. An individual can sell products to consumers.

CONTINUOUS JOURNEY AND STRATEGIC MISTAKES  – EBAY INDIA

I started my journey with e-commerce companies in 2006 and work for a mobile phone accessories business company. So, I have seen the ups and downs of e-commerce websites very closely as I have been in this business for a long time. Other players like Flipkart started in 2007 but they were selling books and later moved to other categories, somewhere in 2010, and converted their website in 2011. Other marketplaces like Snapdeal in 2010 and Amazon in 2013 slowed the business of the company, but they did not stop getting good business.

New companies like Flipkart and Amazon invested heavily in marketing, logistics, and technology to get a good share of online customers. However, eBay India did not work on logistics and marketing and once other companies came up with their USP of guaranteed delivery, eBay had nothing to offer. So, in the name of guaranteed delivery and other discounts, they started losing business in a couple of years and somehow lost their customer base.

Cyber Attack on eBay India in 2014

eBay started losing its grip in 2014 when one morning it was news that eBay is a victim of a cyber-attack and its eBay corporate network is hacked and databases of users. were compromised and eBay.com lost 1.73% share price on the same day due to this news. Later, they notified each customer and asked them to change their password. However, the news flashed in May but this happened in late February to March.

EBay spokeswoman Amanda Miller told Reuters late on Wednesday that those passwords were encrypted and that the company had no reason to believe the hackers had broken the code that scrambled them. “There is no evidence of impact on any eBay customers,” Miller said. “We don’t know that they decrypted the passwords because it would not be easy to do.” She said the hackers gained access to 145 million records of which they copied “a lar ge part”. Those records contained passwords as well as email addresses, birth dates, mailing addresses and other personal information, but not financial data such as credit card numbers. Miller also said the company has hired FireEye’s Mandiant forensics division to help investigate the matter. Mandiant is known for publishing a February 2013 report that described what it said was a Shanghai-based hacking group linked to the Peoples Liberation Army.

Payment Modes – eBay India

eBay India implemented Cash on Delivery but very late because, in the beginning, consumers did not feel much confidence in buying products online as they had a lot of fraud with their cards and banks due to less awareness. However, they had a payment guarantee mechanism named PAISAPAY.  eBay introduced its global model to the Indian market. It introduced features like Cash on Delivery (COD) and offered localized services to cater to Indian shoppers’ preferences. However, these efforts were not always sufficient to compete with the deep pockets and extensive infrastructure investments of its rivals.

Indian consumers were increasingly looking for a smooth shopping experience, a wide variety of products, and reliable customer service. eBay’s auction-based selling model, a unique selling method, might not have aligned with the changing preferences of Indian shoppers who sought convenience and assurance in their online purchases.

STRATEGIC PARTNERSHIP of EBAY INDIA WITH FLIPKART AND END OF JOURNEY

In 2017, eBay India entered a strategic partnership with Flipkart, a major Indian e-commerce player. They invested in Flipkart and integrated its marketplace into Flipkart’s platform. While this move reflected a shift in eBay’s strategy, it could also be seen as an acknowledgment of the challenges eBay India faced in maintaining its independent presence.

As a result of the partnership with Flipkart, eBay India’s dedicated marketplace was shut down in 2018. The company chose to focus on its investment in Flipkart and step back from operating a standalone platform in India. This marked the official end of eBay India’s journey as a distinct online marketplace.

In conclusion, eBay India’s downfall can be attributed to a combination of factors such as intense competition, challenges in local adaptation, logistical limitations, changing consumer preferences, lack of focused investments, and strategic decisions. The dynamic and rapidly evolving nature of the Indian e-commerce market, coupled with the unique demands of Indian consumers, poses significant challenges for eBay India’s sustainable growth. The partnership with Flipkart and the subsequent closure of the dedicated marketplace can be seen as a strategic move to reallocate resources and pivot in response to these challenges.

Views of experts on the merger and shutdown of eBay India

Flipkart CEO Kalyan Krishnamurthy in an email to his employees stated that the company will launch a new platform for refurbished goods, immediately succeeding the termination of all customer transactions on eBay.in. “Based on our learning at eBay.in, we have built a brand-new value platform launching with refurbished goods – a large market which is predominantly unorganised… As part of this launch, we will be stopping all customer transactions on eBay.in on 14th August 2018 and transitioning to the new platform,” wrote Krishnamurthy in the mail.

Flipkart-eBay India merger was announced in August 2017 when the Indian e-commerce company had raised USD 1.4 billion from global technology majors such as eBay, Microsoft, and Tencent. eBay announced the end of the strategic partnership in May,2018, stating that it will relaunch eBay India with a different method to focus on cross-border trade.

Suresh Reddy, Chairman and CEO, Brightcom, said, “With Walmart coming in, this was an inevitable outcome. eBay had to be out. It was a clear case of conflict of interests.”

Brand expert N Chandramouli, CEO, TRA Research, believes that eBay will most likely come back. “This shut down is only a change in position, which was necessary after the Walmart deal. It must have been a part of the deal structure. eBay is likely to restart soon in a non-competitive space with Flipkart.” Commenting on the refurbished market, he said, “India is a value conscious market and the refurbished goods segment has been functioning in an informal way for ages now. However, if Flipkart is entering this marketplace, it needs to be very careful about the promise versus the delivery. If they are able to build trust, they can enjoy success. Else, the business will collapse.”

Talking about what went wrong with eBay, Ashish Tiwari, Head- Digital Marketing, Hero Motors Company, said, “Hyper growth market requires investment and focus, which eBay lost somewhere on the way. For Flipkart, it did not make sense to continue with the investment required to keep it alive. It was eminent that Flipkart was only waiting for users to migrate from eBay to its own platform before they called it quits.” About Flipkart’s plan to enter the refurbished market, Tiwari said, “Indians have a tendency to buy fresh goods and it would take an attitudinal shift before refurbished items become acceptable.”