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