American e-commerce firm eBay has invested and forged a multiyear commercial partnership with Indian e-retailer Snapdeal.com.
Though the company has not officially disclosed the investment amount in Snapdeal.com, according to industry sources, it could be around $50m.
eBay has acquired undisclosed stake in the company through a funding round that also included participation from Intel Capital, a subsidiary of Intel and Nexus Venture Partners among other firms.
The latest funding round values the Indian online retailer at $250m.
With this partnership, eBay has furthered its registered users’ band of five million in India, by adding 20 million more customers, according to The Wall Street Journal.
In addition, the company has also gained access to Snapdeal.com’s logistics software and distribution network.
Commenting on the alliance, eBay Asia Pacific senior vice president Jay Lee told The Wall Street Journal that company has selected Snapdeal.com due its competitive business model, efficient management team and the market value of the brand.
Meanwhile, Snapdeal.com chief executive Kunal Bahl told the publication that both the online retailers would offer limited products range on each other’s Indian websites.
Bahl is keen to list fashion category on eBay’s site.
Snapdeal.com is expecting to gross revenues of $400m in 2013, up from $100m recorded in 2012.
Talking about the online retail scenario in the country, Bahl claimed that the sector has a wide scope and increased opportunities. However, currently only 10% of internet users opt for online shopping.
eBay has introduced a simplified shipping scheme through which it expects to increase its customer density from developing countries to 25% over next two years from current 5%.