How it all started: Fair and efficient internet market Overview
Pierre Omidyar 1995 – changed the world indeed
Initially traded collectibles (e.g. PEZ)
1996: Gross Margin 80%-96%
January 1997 hosted 200 000 auctions
Need of better IT architecture
Currently: Overview Overview
90 million active users globally
Mission: World's largest online marketplace where practically anyone can buy and sell practically anything
2009:the total worth of goods sold on eBay was $60 billion -- $2,000 every second.
Revenue: advertising, listing and value fees, merchant fees, revenue sharing agreements, contractual service fees and classified and lead referral fees.
Current CEO: John Donahoe
since 2008 eBay Annual Report 2009
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
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
Paying Strangers: How to make it safe Payment
Easy C2C payments
Free service for buyer, tax for seller
2002 acquired by eBay
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)?
Competitors: Why the King stays? Competition Competitor threats Power Source of revenue Centrality Mobile platforms Consumer Security
European Strategy: Pan-European Dominance Go Global 2. Leverages Ireland Own inventories
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
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
Aggressive ad campaigns
Failed to recognize the Chinese market
Top management: no Chinese
Global platform ≠ local tastes
Free of charge
User friendly: 10% auctions
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?
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?
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
THANK YOU! and now don’t you wanna go buy something from eBay :D