Q&A : Why did eBay lose the plot, or never took-off despite an early player in Indian e-commerce space?

I think the greatest challenge with eBay in India is the Indian culture. This might sound counter-intuitive since Indians love haggling, and eBay is a great platform for haggling.

Let me explain with a preamble: I have been a customer of eBay .com in the US for over 15 years. I sold my first car – a 15-year old Toyota Corolla – to an eBay buyer over 12 years ago! The buyer bid just above my reserve price and called-me after the successful bid, came and picked up the car. I have bought and sold several high and low value items on eBay over the years. It is still the go-to place for rare/discontinued items. For instance, when Ray-Ban discontinued a certain model of prescription glass frames I like, I went to eBay and bough a couple of pairs to keep as spare.

eBay in America has been extremely successful since it created an ecosystem around a culture of haggling and trust designed into eBay’s eCommerce platform. Add to, it continues to enhance its ability to police and quickly weed out fraudulent buyers and sellers.

Image Source eBay India

So, why is eBay struggling in India?

I have also been using eBay .in for the past few months. On the surface, it is similar to eBay .com with a few differences (like paisa pay instead of paypal, enabling COD etc). The other major difference is that the market is not mature yet. A trust based system requires a number of buyers and sellers who can be trusted.

(My eBay profile)

Challenges I have encountered as a buyer and seller include:

  • Inability to disallow fake/fraudulent bidders who bid up my item with no intent of paying for it. After I encountered fake/non-serious bidder during my recent auction listing, I contacted eBay customer service. The CSR explained that they try and monitor users and disable accounts after a “few times” if the buyer bids and refuses payment. Few times is one time too many when it comes to customer satisfaction.
  • Whack-a-mole approach to weed out fraud. India is a large country and users have the ability to create multiple/“benami” accounts. I am suspecting that by the time eBay disables an account, the said person has moved on to using another account.
  • Lack of sellers willing to offer competitive prices: Some sellers haven’t got comfortable with auction model and prefer “buy it now” prices that are predictable.
  • Lack of critical mass. A trust based system requires a number of buyers and sellers who can be trusted. There aren’t many buyers and sellers on eBay .in with dozens of positive reviews that one can begin to trust.

Bottomline: The market for auctions is not yet mature. eBay is the largest online auction portal even in India, and it continues to grow and mature as it builds a pool of buyers and sellers.

Leave a Reply