eBay 2014

EBay 2014

Release date: November 12th, 2014 (125 pages)
PDF/Powerpoint format. Price: GBP1,200.00


There has not been a more interesting time to study eBay.

Strategically, the company is at a crossroads having blazed an expansive acquisition path over the last year and a half particularly in mobile, yet will almost halve in size when PayPal becomes independent in 2015, eBay’s fastest growing business arm (18.5% net revenue growth in 2013).

In terms of reputation, how will eBay rebuild trust with customers again after the cyberattack earlier this year saw customer data stolen? The way the company handled the event by only revealing what happened a couple of months after it happened was ill judged. A lengthy process to win back the confidence of consumers is paramount for eBay.

Competitively, how will eBay fare in the fierce online marketplace sector from the standard setting Amazon, who has overtaken eBay in terms of gross merchandise volume? What about the growing global threats of Alibaba and Rakuten? How will eBay’s presence and power in the market be affected without PayPal? Could eBay be an acquisition target?

Therefore, both internally and externally, eBay is forced to confront serious challenges as a smaller entity and this makes for a fascinating next couple of years for the company.

EBay will need to go back to its roots as an online ecommerce business after shedding PayPal and focus on its core C2C and B2C ecommerce offerings, improving customer service and experience and attracting more big name brands to sell on the site. EBay will also need to significantly grow eBay enterprise, the B2B ecommerce solutions business, to fill some of the void left by PayPal.

To ensure that the shrinking in size does not affect eBay’s competitiveness at home and abroad, the company needs to be innovative. Fortunately, there seems to be plenty of that spirit around with eBay increasing its presence in offline stores, investing in technology, utilising social media to good effect and expanding its fulfilment operations. The company continues to consolidate in its core overseas markets as well as investing in emerging markets, where the level playing field is more equal.

The report provides a comprehensive study into eBay’s business model looking in depth at the issues above and more. The thought provoking content and individual insights from the analysts that emanate from the transitional period eBay is currently facing provides for a timely and engaging read.

Table of contents

Executive summary: eBay p10
The core of the business model: the marketplace p16
Strengths of marketplaces: the model p17
Strengths of marketplaces: data benefits p18
Strengths of marketplaces: data benefits, pricing power p19
Strengths of marketplaces: pricing power, beneficial cash flow p20
Strengths of marketplaces: beneficial cash flow, unlimited range p21
Strengths of marketplaces: unlimited range p22
Strengths of marketplaces: network effects p23
EBay: Introduction p24
Introduction: eBay – three businesses soon to become two p25 Introduction: enterprise, the move away from auctions p26
Introduction: professionalising and the channel shift p27
Introduction: the rise of wearables p28
Introduction: the advertising opportunity, eBay’s subsidiaries p29
Recent key developments p30
June 2013: full-priced fashion store launch, Dressipi trial p31
September 2013: eBay and Argos in-store collection, Shutl acquisition p32
November 2013: eBay and Westfield Labs’ digital storefronts, Debenhams joins p33
December 2013: eBay officially bring Magento into the enterprise division p34
December 2013: eBay acquires StackMob and Braintree p35
January 2014: eBay enterprise launches Ship-from-Store p36
January 2014: Carl Icahn proposes a PayPal spinoff p37
February 2014: acquires 3D graphics company PhiSix, widens baby category p38
February 2014: eBay increases investment into India p39
February 2014: eBay advertising launches partnership with Acxiom p40
March 2014: eBay introduces “the transaction defect rate” p41
March 2014: Magento lays off workers, Carl Icahn’s proposed PayPal spinoff rejected p42
March 2014: social retailing with eBay Collections p43
April 2014: Carl Icahn calls truce as eBay’s sales climb 11% in Q1 p44
May 2014: eBay enters Latin American markets p45
May 2014: eBay the target of a massive cyber attack p46
July 2014: Adidas to resume sales on eBay p47
September 2014: announcement of eBay/PayPal split, Autobutler partnership p48
September 2014: re-entering mobile ads p49
October 2014: launch of live auction service, FC developments in Germany p50
October 2014: first global brand design campaign, Q3 results p51
Financials, KPIs, benchmarks p52
KPIs: strong GMV growth, while vehicles’ GMV is in decline p53
KPIs: GMV per country in €m 2008-13, USA, DE, UK, Korea, e p54
KPIs: GMV by region, weakness in China and Japan due to past missteps… p55
KPIs: …and the strength of local competitors Alibaba and Rakuten p56
KPIs: figures – Dec 2013 p57
KPIs: net revenue, net income, margin, growth 2009-13 p58
KPIs: net revenue, marketplace, payments, enterprise, growth 2009-13 p59
KPIs: revenue analysis – the outperformance by PayPal p60
KPIs: marketing services and other revenue, growth 2009-2013 p61
KPIs: revenue analysis – US versus international p62
KPIs: UK performance, Shutl as FBA equivalent forerunner? p63
KPIs: Germany performance, should Amazon be worried? p64
KPIs: South Korea performance, a launch pad to expand further into Asia? p65
Strategy – the marketplace p66
Marketplace: serving sellers and buyers p67
Marketplace: top rated sellers, buyer protection as barriers to entry p68
Marketplace: eBay’s move away from auction house p69
Marketplace: flea market, fakes and luxury players protecting their brand p70
Marketplace: the effects of the split on eBay, rethinking auctions p71
Marketplace: eBay and its back end problem p72
Marketplace: bearish on fortunes past the PayPal spin off, new competitors p73
Marketplace: losing the pioneers, weakening the ecosystem p74
Strategy – PayPal p75
PayPal: the jewel in the crown, moving to offline payments p76
PayPal: PayPal on other online platforms p77
PayPal: All stakes on the digital wallet? p78
PayPal: On course to become the number one digital wallet? p79
PayPal: co-existence of digital wallets, cash and card payments p80
PayPal: How will PayPal fare after the split? Apple Pay p81
PayPal: the opportunities after the split, new partners, new verticals p82
PayPal: charities, university, QSRs, scaling up across the globe p83
PayPal: Reduction in duplication of eBay sales teams, on acquisition target? p84
Strategy – enterprise p85
Enterprise: three primary lines of business p86
Strategy – eBay Now, Fulfilment p88
eBay & Speed: fulfilment p89
Fulfilment: a key battleground p90
Fulfilment: eBay UK and Argos partnership p91
eBay Now: the personalised eBay Now service p92
eBay Now: teething problems, eBay Now service stalling p93
eBay Now: deliver straight to shoppers’ location, GPS signal from smartphones p94
eBay Now: service proposition, use cases, gifting, luxury p95
Strategy: Is eBay the wrong company to offer this service? p96
Uber’s Corner Store: an emerging rival – offering the grocery category p97
Strategy – Advertising p98
eBay: a marketplace or a platform for advertising? Inherent contradiction? p99
Advertising: network effects p100
BMW Advertising: network effects p101
Advertising: Sony, House of Fraser p102
Advertising: eBay’s own TV advertising – multi screen strategy p103
Advertising: eBay advertising launches partnership with Acxiom p104
Advertising: Is it worthwhile advertising on eBay? Perfect visibility p105
Advertising: teaming up with social media p106
Advertising: Should companies advertise on eBay? ROI attribution offline? p107
Advertising: Should companies advertise on eBay? Costs p108
Strategy – global p109
Strategy: global p110
Strategy: Latin America, MercadoLibre – from partnership to competition p111
Strategy: Latin America – introducing an “eBay Prime” p112
Strategy: India – risk of losing out to Amazon and the locals p113
Strategy: Russia – the opportunity in used cars p114
Strategy: South East Asia – coming up against Rocket Internet once again p115
Strategy – Should eBay introduce a tablet of their own? p116
Strategy: Should eBay introduce a tablet of their own? p117
Outlook p118
Outlook: losing PayPal and its main source of growth, an opportunity? p119
Outlook: the cyber attack and subsequent recovery p120
Outlook: how to innovate, delivery, personalisation, RedLaser acquisition p121
Outlook: getting ready for wearables, RedLaser for Google Glass p122
Outlook: competing with Amazon and the rest p123
Sources p124
Table 1: strong GMV growth, while vehicles’ GMV is in decline p53
Table 2: GMV per country in €mn2008-13, USA, DE, UK, Korea, e p54
Table 3: net revenue, net income, margin, growth 2009-13 p58
Table 4: net revenue, marketplaces, payments, enterprise, growth 2009-13 p59
Table 5: marketing services and other revenue, growth 2009-13 p61
Table 6: revenue analysis – US versus International p62
Chart 1: Strengths of marketplaces: the model p17
Chart 2: Figures- Dec 2013 p57
Chart 3: EBay & Speed: Fulfilment p89