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What is EBay?The World's Online Marketplacefor the sale of goods and services by a diverse community of individuals and businesses
provide a global trading platform where practically anyone can trade practically anything.
eBay
Cont…
• It is headquartered in San Jose, California.
• eBay was founded by Pierre Omidyar in 1995, and became a notable success story of the dot-com .
• Operating in 37 countries with 233 million customers till 2015.
eBay
Cont…
Global trading platform
eBayAnybody
Anybody
Anybody
Anybody
Anybody
buy
sell
eBay=
Anything
Anything
AnythingAnything
eBay
History
• How did the idea of selling practically anything to anyone, anywhere start?
Pez Candy Online Auction
eBay
Seller
eBay Trading
Community
• 157millionregistered users
Buyer
Lists item
AuctionsFees($$)
Notification ofWinning buyer!
FeedbackOn buyer
1
8
4
5
Feedback on seller
Notification ofWinning bid!
2
4
Bids on item3
Buyers and sellers leaveFeedback on each other7
Ships item (after exchanging e-mail)6
Sends payment (after exchanging e-mail)6
Registration0 Registration0
eBayHow its operating..
eBay the first virtual online business community that..
• Empowers entrepreneurial individuals to become e commerce business owners.
• Offers a sense of community to buyers and sellers through communication and interaction.
• Provides a faster ,easier and safer online commerce experience.
eBay
Mode of communication
• EBay uses Skype as mode of communication for its e commerce purposes.
• E bay’s E commerce also provides..
1. Full support for buying process.2. Chat services.3. Protection programs.
eBay
Corporate revenues generation
• Ebay.com earns its corporate revenues from three business segments…
1. Marketplaces2. Payments3. communications
eBay
The EBay market place
• EBay transformed the internet and way of shopping and doing business.
• It is an online virtual trading platform for the sales of goods and services by a community of users.
• It also provides virtual marketplace auction where the market determines the price of the item.
• Offers millions of item for sale through auction style and fixed price trading.
eBay
EBay is operating in….
World Market Regional Market
Asia Pacific Australia,China,Hong Kong,India,Malaysia,New Zealand,Singapore
Europe Austria,Belgium,France,Germany,Ireland,Italy,netherland,Poland,Sp-ain,Sweden,Switzerland,UK.
North America Canada, United States
Latin America Argentina,Brazil,Chile,Colombia,Mexico,Peru,Costa Rica and Panama.
eBay
Mission & Vision statement 2015
”At eBay, our mission is to provide a global online marketplace where practically anyone can trade practically anything, enabling economic opportunity around the world.”
eBay
EBay's Market Place platform
• Traditional auction style or fixed price options are offered in 39 markets..
Auction Style
Fixed Price
eBay
A Trusted Online Community
• To facilitate trading with unknown partners on internet EBay provides a trusted and safe trading environment by offering the following services,
• Feedback Forum• Safe harbor program
eBay
Feedback Forum
• Provides feedback, comments and ratings on other users that can be viewed by other user when considering the purchase.
• Information is recorded up to 12 months and provides color coded stars rating.
eBay
Safe harbor program
• Provides guideline among parties to resolve disputes.
• Complaints are investigated and offenders may receive warnings that are posted to users.
• Violators may be suspended from either bidding on or listing items for sale.
eBay
EBay Acquisitions
Name Acq.. Year
What its about..
StubHub.com 2008 Leading US ticket marketplace that allows users to buy and sell tickets to sporting,events,theater and entertainment events.
Shoping.com 2005 An online comparison shopping site that offers comparisons on million of products and services and provide reviews .
Rent.com 2005 Lists apartment availibility,rental costs ,virtual tours ,roommate searches and more.
eBay
Business Segment ll
• Payments EBay's payment segment is composed of two
solutions.
1. PayPal
2. Bill me later
eBay
PayPal • PayPal was founded in dec1998 and acquired by eBay in 2002.
• Global leader in online payments solution with 170million active accounts.(2015)
• PayPal has captured 85.64% of US e-commerce and 68.1% of global e- commerce trade.(2015)
• Higher fees earned on international transactions have provided eBay with higher revenue and gross margins as compared to revenues from domestic transactions.
• PayPal is accepted both offline and online in 203 markets worldwide and processes payments in 26 currencies.(2015)
eBay
Bill me later• Acquired by eBay inc in 2008.
• Offers consumers instant credit at the point of sale through over 1000 online US merchants, retailers that offer the bill me later services.
• As bill me later is not a chartered financial institution so an arrangement with CIT Bank allows bill me later to extend credit to customers.
• Bill me later earn revenues from interest on outstanding balances, late fees and transaction fees.
• PayPal acquired bill me later in 2008
eBay
Business Segment lll Communications
Skype• Founded in 2003 and acquired by eBay in 2005.
• Skype has approximately 1 billion registered users worldwide.(2015)
• Headquarters are located in Luxembourg.
• Skype allows buyer and seller communications24/7 in a secure and trusted community that is supported by free internet voice and video calling.
• Used in 225 countries and in 38 languages.
• Revenue is earned through premium services such as making call from landline to Skype etc.
eBay
Strengths• Largest Online Auction (eBay has over 94.9 million registered users in more then
150 different countries)• Recognizable Brand Name (Unique Logo, Colors and Branding in terms of publicity
as compared to Amazon etc.) • Over 250 Alliances. (eBay holds 250 alliances with top-notch international
companies including PayPal, Walt Disney, IBM, UPS, America Online, Trade Safe and I-Escrow)
• Global Reach (People from all over the world can connect virtually and find their products of interest on eBay)
• Over 27,000 Different Categories (Wide Array of products allows them to be the leading online auction site - kind of like the Wal-Mart of the Internet)
• Sense of Community (Making the customers a priority and coming up with new ways to reach out to them for example: eBay University)
• No requirement of traditional sales force. (Keeps cost down in terms of training, payroll and salary)
eBay
Weaknesses • Inability to Measure Illegal Activity on Site (Customers claim about 10
percent fraudulent transactions)
• Inability to Penetrate Some Foreign Markets (eBay has failed to take over one of the most crucial foreign markets, i.e. Japan.)
• Lack of In-Depth Descriptions for Products ( eBay fails to give in-depth description of all the products which could lead to wrongly sold products to the customers)
• Technology Malfunctions (Technology malfunctions are always going to be a factor when dealing with websites and online shopping i.e. to keep hackers out of personal PayPal and eBay accounts)
eBay
Opportunities • Growing number of mobile shoppers (The growing number of mobile shoppers
represents a huge growth opportunity for PayPal as its one of the few payment systems that meets the requirements for convenient shopping and payment processing on the go.)
• Become a retailer. (eBay has an access to hugest online marketplace in the world and is well placed to take an advantage of that by becoming a retailer.)
• Increase services portfolio through acquisition. (The company has successfully acquired many companies to extend its services offering and should continue adding new services through mergers and acquisitions.)
• Open more online stores in other countries. (To sustain current growth levels, eBay could open its online marketplaces in other large and growing economies in Asia and Europe.)
• Changing lifestyles. (People are using the internet more and more to pay bills, talk to family, and shop. eBay can use this opportunity for continued market penetration and expansion.)
eBay
Threats • Thieves (Threat of fraud and illegal actions in online shopping) MEDIUM
• Increasing Number of Online Trading Sites ( eBay already has many competitors surrounding them including Amazon.com, uBid, and ePier which makes it harder to encompass a competitive edge in the market) HIGH
• Rapid Growth of Amazon.com (May have the potential to take over the largest market share in the online auction industry) MEDIUM
• Increasing Number of Online Stores (Competition with online retailers such as JC Penny, Target, etc) HIGH
• 1/3rd of Americans already registered on the website. (United States is eBay’s main customer. Poses a threat to their continued rapid growth universally because they will start to run out of customers to join their site) HIGH
eBay
® 2006, Tony Gauvin, UMFK 36
SPACE Matrix
6 -12 -46 -35 -56 -6
5 -4
Financial Strength (FS)Return on I nvestment (ROI )LeverageLiquidity
Environmental Stability (ES)Rate of I nflationTechnological ChangesPrice Elasticity of Demand
Working Capital Cash Flow
Competitive PressureBarriers to Entry into Market
Environmental Stability (ES) Average Financial Strength (FS) Average
-1 5-2 4-2 4-3 4-5 6
-2.6 5
Competitive Advantage (CA) Industry Strength (IS)
Competitive Advantage (CA) Average Industry Strength (IS) Average
Customer Loyalty Rivalry Among CompetitorsTechnological know-how Resource UtilizationControl over Suppliers and Distributors Profit Potential
Market Share Growth PotentialProduct Quality Financial Stability
eBay
Suggestion/Recommendations
Expand to all countries of the world
Advance in security of personal information
Increase in Industry
Increase revenues by capturing more customers
eBay
Question No 1
• EBAY failed badly in Japan and has to close its operations there what do you think could be the reason?
eBay
Answer• Yahoo Japan started operating as an online auctioneer in
1999 and captured 95% of the Japan e commerce market.
• EBay entered in Japan five months the yahoo and was only able to capture 3% market.
• EBay's first mistake in the Japan market was coming in late. And when eBay Japan did launch--five months after Yahoo Japan--it charged a commission for each transaction. Yahoo Japan doesn't.
eBay
Contt..• Another possible misstep was Whitman's choice of Okawara, a
second-generation Japanese-American from Hawaii, as president and CEO. Okawara was well-known in Japan for turning a faltering frozen-pizza business into a $100 million company. But at 60, she was twice the age of most of her eBay Japan employees and new to the Internet
• At the same time, eBay Japan also took a low-key approach to marketing, relying on its usual formula: rather than spend big bucks on advertising, just let auction fans spread the word. That passivity backfired in Japan because eBay had too few users. In contrast, Yahoo Japan spends some 8% of revenue on promotions
eBay
Q:2
• Amazon with almost 250Billion$ market capital is almost going to kick eBay out of business. What strategies should eBay adopt against it?
eBay
Answer• Most people think of eBay as an online auction house.
• The company beyond auctions is developing technology partnerships with big retailers like Home Depot, Macy’s, Toys ‘‘R’’ Us and Target and expanding eBay’s online marketplace to include reliable, returnable goods at fixed prices. (Auctions currently represent just 30 percent of the purchases made at eBay.com; the site sells 13,000 cars a week through its mobile app alone, many at fixed prices.)
• eBay has made 34 acquisitions over the last five years.
• eBay’s vision of the future is the digital wallet. On a basic level, having a ‘‘digital wallet’’ means paying with your phone, but it’s about a lot more than that; it’s as much a concept as a product.
eBay
Q:3
Traditional retailers are a big problem for eBay.
Q:What strategies should adopt ?Should eBay also open a traditional store like Amazon and wall mart?
eBay
Answer
• This will cost company a lot of money, instead it should focus more on PayPal as it is separated from eBay and is earning more revenues for eBay then its other two marketplaces.
eBay