eBay another channel for retailers
As online marketplace eBay sells increasing amounts of goods at fixed-price rather than through its auction process it is calling for more major retailers to offer their difficult-to-sell items via its global platform.
By Glynn Davis in Barcelona
Speaking at the World Retail Congress in Barcelona John Donahoe, president and chief executive of eBay, made clear that eBay is not a retailer but is simply providing a platform for goods to be sold online. He says this is attractive to merchants around the world who could use it as a channel to market.
“eBay was initially attracting small and medium-sized sellers, but over the last several years we’ve focused on bringing larger retailers who could sell things that are not selling in-store. eBay is a great channel for selling end-of-season, old items, nearly-new items and refurbished goods. And because it is a marketplace retailers can put loads of products for sale one day and then none the next,” he suggests.
Donahoe regards this trend as part of the blurring between the online and offline worlds of retail: “They are converging because it’s what consumers are doing. They want us to break down the barriers.” However, he is sceptical of moves being made by some retailers to create their own online marketplaces, similar to eBay, as they will likely compete with its core retail businesses.
Consumers increasingly purchase on eBay at fixed price rather than throug auctions. Five years ago two-thirds of sales were via auction, but this has redued to 50 per cent. Donahoe also points out how the group has been diversifying its revenue streams over the years with its PayPal payments tool continuing to grow rapidly – it is forecast to account for 33 per cent of total group revenues in 2009. This is a result of it being increasingly used by retailers as an alternative payment mechanism offered alongside regular payment cards.
Such moves to develop the business will continue, according to Donahoe, because “as a technology company you can never stay still”. He adds: “Customers are changing the way they shop and in the online world it is brutally Darwinian”. He suggests the online shopping experience for consumers will change over time and that at present it is “fragmented and frustrating”. Donahoe also forecasts other developments will centre on shopping on multiple devices; a continuation of the blurring of the online and offline channels; and shoppers demanding more convenience.
