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The New Alliance Helping eBay Court India’s Online Shoppers

eBay is back for round two in its attempt to win over India’s online shoppers.

The company has purchased a minority stake in Paytm Mall, an e-commerce marketplace run by Paytm, India’s leading online payment system.

In addition to buying a 5.5 percent stake in the company (for somewhere between $150 and $200 million, according to TechCrunch), the arrangement will make eBay inventory accessible to India’s tens of millions of Paytm Mall shoppers. Paytm has more than 450 million registered customers, and more than 130 million active users in India, according to a release from eBay. The company claimed 12 million registered merchants are currently using Paytm’s payment solutions.

The partnership between eBay and Paytm Mall demonstrates the Silicon Valley stalwart’s enduring desire to do business in India. The move comes after a tenuous and ultimately doomed alliance with Flipkart, which ended last year.

In April of 2017, eBay made a $500 million cash investment in Flipkart and sold its business to the Indian e-commerce marketplace. A year later, in spring of 2018, Walmart purchased a majority stake in Flipkart (77 percent for $16 billion, according to a statement on the company’s website).

The shift in ownership prompted eBay to sell back its $1.1 billion investment in the business and look to strategies to start fresh in the Indian market. In addition to Flipkart, which is a major player in the online space, formidable foes Alibaba and Amazon India are vying for market share in the country, which represents the second largest economy in Asia.

After licking its wounds for a year, is back with a new approach.

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According to a statement from the company, the Paytm Mall relationship will benefit eBay sellers globally by providing them the ability to reach the rapidly growing Indian market, while also exposing Paytm Mall consumers to an array of global inventory that isn’t available domestically.

Over the coming weeks, eBay said, “millions of products sourced from eBay sellers around the world will be surfaced on the Paytm Mall shopping experience within the Paytm ecosystem.”

Since re-launching in early January, the company has also been focused on building up its network of small and medium sized Indian sellers on the site. Paytm’s payment solutions are designed to facilitate cross-border transactions, opening up India’s products to eBay’s 182 million customers across the globe.

While Amazon India and Flipkart are focused primarily on selling within India, the facilitation of cross-border commerce through Paytm Mall may prove to be a way eBay differentiates itself. Paytm Mall has worked to develop strategic partnerships to work around the challenges that cross-border trade presents, like high delivery costs, long wait times and complicated returns. Additionally, the company deals with regulatory requirements, like the payment of customs and duties.

“Today’s Indian consumers have expanded their horizon and now like shopping for unique products from international platforms,” said Rudra Dalmia, Paytm Mall’s executive director. “This new strategic collaboration will ensure Indian consumers are given greater access to eBay’s vast selection of inventory. We’re excited about this relationship with eBay as our cross-border partner and investor and believe together, we will provide buyers and sellers an unparalleled opportunity to discover, engage and transact on our platform.”