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E-bay Presentation Transcript

  • 1. Going, Going, Gone! – Consumer Auctions
    Prof. Lattemann
    Organizational Design for Networks - Fall 2010
    MariyaArnaudova
  • 2. Consumer-To-Consumer Transactions: Long ago…
    C2C
  • 3. Consumer-To-Consumer Transactions: Online Auctions
    C2C
    Internet Newsgroups: search listings (burdensome)
    Web-based auctions:
     listing and transaction fees
     independent arrangement of shipment and payment
     special-interest sites
    Seller 1
    Buyer 1
    Transactions platform
    Intermediaries
    Seller 2
    Buyer 2
    Seller 3
    Buyer 3
  • 4. How it all started: Fair and efficient internet market
    Overview
    • Pierre Omidyar 1995 – changed the world indeed
    • 5. Initially traded collectibles (e.g. PEZ)
    • 6. 1996: Gross Margin 80%-96%
    • 7. January 1997 hosted 200 000 auctions
    • 8. Need of better IT architecture
  • Currently: Overview
    Overview
    • 90 million active users globally
    • 9. Mission: World's largest online marketplace where practically anyone can buy and sell practically anything
    • 10. 2009:the total worth of goods sold on eBay was $60 billion -- $2,000 every second.
    • 11. Revenue: advertising, listing and value fees, merchant fees, revenue sharing agreements, contractual service fees and classified and lead referral fees. 
    • 12. Current CEO: John Donahoe
    since 2008
    eBay Annual Report 2009
  • 13. Trading Community:How does it work?
    Services
    Proxy bidding: winning bidder pays the price of the second-highest bid plus a defined increment
     price paid is determined only by competitors' bids and not by the amount of the new bid
    Auction-style listings: offer items for sale for a specified number of days
    Buy-It-Now Option
    Last bid displayed
  • 14. Trading Community: Ensuring Trust
    Services
    Seller Rating: Transaction-related feedback
    Buy-It-Now Option
    Payment: PayPal
    Buyer Protection Policy
    Detailed Item Description
  • 15. Trading Community:Diverse Possibilities
    Services
    eBay Stores: sellers’ showcase
    establish their own brand (auction or fixed price)
    ProStores: subscribers design own online stores
     hesitant about real business?
     easy connection with eBay
    Shopping.com: price comparison service
     eBay sellers got access to buyers search of fixed price
     fixed price listings increased
    eBay Motors:  Buy and sell all types of vehicles
     Autos, Used Cars, Motorcycles, Boats, Trucks, Parts
  • 16. Paying Strangers: How to make it safe
    Payment
    • Easy C2C payments
    • 17. Free service for buyer, tax for seller
    • 18. 2002 acquired by eBay
    • 19.  PayPal Buyer Protection Policy states that the customer may file a buyer complaint within 45 days if he did not receive an item  get a refund via chargeback from his credit-card company
  • Competitors: Dethroning the King?
    Competition
    “Even the best products don’t always sell out in stores, so when our trusted selling partners have excess inventory they sell it with us at prices far below retail.”
    World’s leading B2B e-commerce company: 32 million users, 240 countries
    Unique user interface features that make for an enjoyable experience
    Works best employing sellers currently established ecommerce sites and then utilizing Google Product Search as a information organizer and checkout tool
    B2C: Sell consumer products around the world – sustaining healthy growth
    Next generation shopping destination:  link advertisers and help them reach the right consumers at the right time
    Powerhouse in e-commerce
     Utilize network capabilities of pre-established communities (e.g. Facebook)?
  • 20. Competitors: Why the King stays?
    Competition
    Competitor threats
    Power
    Source of revenue
    Centrality
    Mobile platforms
    Consumer Security
  • 21. European Strategy: Pan-European Dominance
    Go Global
    2. Leverages
    Ireland
    Own inventories
    • B2C
    • 22. C2C
    Austria
    Switzerland
    Alando.de
    1999/2000
    France
    Sweden = failure
    3. Own Websites
    1. Acquisitions
     eBay has the administrative strength to cope with so many national rules
  • 23. Asian Strategy: Not a success story
    Go Global
    = first mover advantage + free of charge + favored payment method
    = first mover advantage on the national market
     eBay acquired it, but did not integrate it
    South Korea
    VS
    • Listing and transaction fees
    • 24. Aggressive ad campaigns
    • 25. 40% auctions
    • 26. Product oriented
    • 27. Failed to recognize the Chinese market
    • 28. Top management: no Chinese
    • 29. Global platform ≠ local tastes
    • 30. Free of charge
    • 31. TV ads
    • 32. User friendly: 10% auctions
    • 33. Customer-oriented
  • Conclusion: Successful Business Model? Next?
    Conclusion
    TRUST
    Seller 1
    Buyer 1
    Transactions platform
    Intermediaries
    Seller 2
    Buyer 2
    Seller 3
    Buyer 3
    No inventory
    No stock
    No distribution
    Low operation costs
    Low business risks
    High profits
    Do you think that the Business Model of eBay is really successful?
    What do you think should be the next steps for improvement?
  • 34. Conclusion: Growth Sustained?
    Conclusion
    Share price change since the beginning of eBay – source: NASDAQ
    Highest peak
    Now what?
    Paper written
    According to the graph of the American Stock Exchange, do you think the growth is sustainable? Doesn’t it remind you of something we studied?
  • 35. Theoretical debate: Perfect Market = e-commerce?
    Conclusion
    Perfect Market
    Participants without power to set prices
    Perfect Market
    Information
    Perfect Competition
    No barriers of entry/exit
    +
    +
    =
     Price regulation according to the number of sellers/buyers
  • 36. THANK YOU!
    and now don’t you wanna go buy something from eBay :D