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Top 3 Strategies Adopted by eBay to take Advantage of Mobile Penetration

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Top 3 Business Objectives: Acquisition, Activation and Activity

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Overall objective of the campaign was to increase the GMV and net revenues from it’s customers. Below are the detailed objective list for the study for mobile penetration.

  • Acquisition: increasing the acquisition of new registered users on the eBay marketplace.
  • Activation: introducing the new registered users to become active bidders, buyers or sellers.
  • Activity: increasing the volume and value of the business transactions from the active users.

The focus on the above three objectives were equally important for eBay but different priorities were set in different local markets. Their marketplace growth was driven by identifying new approaches to improve performance from these areas.

First and foremost, category growth, was achieved by expanding the number and size of categories within the marketplace. Like, Art, books, industrial and business goods.

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Second, formats for interaction, eBay developed its platform to enable it’s sellers with a wide range of products to showcase their products in a more trusted and reliable retail format including the buy-it-now-fixed-price format.

eBay, has constantly focused on entering in cross – verticals to upscale it’s original marketplace in bringing buyers and sellers at the same platform. It has acquired a few sizeable companies, for example, acquisition of mobile.de in Germany in 2004 and marktplaats.nl in the Netherlands, as well as Rent.com enabling eBay entering into online housing and apartment rental category and many other firms either acquired or invested in it.

Approach/Strategy adopted by eBay:

eBay has three major business areas ; marketplace, paypal and GSI.

  1. eBay marketplace: By introducing the fixed-price listing format v/s only auctioning of the products in the year 2012, accounted for over all 66% of the eBay’s GMV and remaining 34% from GMV. Marketplace also include other sites like shopping.com and stubhub. The main mission being to ‘create world’s online marketplace’. It has other vertical formats, such as classifieds, Daily Deals, Fashion, Motors (Vehicles, parts and accessories) and Electronics.

It is imperative to learn that eBay’s focus shifted it’s approach from safety, ease of use and reliability of the trading platform to changing priorities for trust, value, selection and convenience.

  1. Paypal: Acquired in the year 2003, it is focused on creating new global business standard for online payments. It is one of the main contributor to the eBay’s business achieving 43% of the total revenues in 2012.
  2. GSI, acquired in 2011 and contributed 7% of the total revenues in 2012. Here, it provides interactive marketing services and e-commerce to enterprise clients providing bespoke business merchandise and fulfilment services including merchandising, apparel, sporting goods, toys and baby, health, beauty and home to some of the world’s leading brands.

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Strategy adopted:

It is a well known marketplace for bringing sellers and buyers either through fixed-price or auction basis providing an opportunity to the buyers to either bid or buy as is listed. There are other software and assistance tools are provided for the regular traders, like Turbo Lister, Selling Manager and Selling Manager Pro, which help in automating the process, shipping calculator and reporting tools.

eBay, purely focuses and adheres to the company values, which are now a communication strategy, which is resulting in effective results. For buyers, it concentrates on Trust, Value, Selection and Convenience. It also host Neighbourhoods, a chat platform allowing like minded buyers to provide reviews on brands and products.

For sellers, the communication strategy is

  • Access to broad global markets.
  • Efficient Marketing and Distribution practices.
  • Opportunity to increase Sales.

It provides new incentive schemes and standards and the sellers with high Detailed Seller Ratings (DSR’s) will be favourably featured on the market place by providing higher visibility on the organic search and will provide additional discounts to them.

Results achieved by eBay

Within a short period of time in adopting new strategies and building the communication strategies by building trust among the sellers and buyers, eBay recorded a growth rate of 19% year on year in Q1’ 2013 equalling to $49 billion revenues for the Quarter.

  • With easy to use/browse market place, users started to use mobile for their transaction by adding 2.8 million marketplaces and paypal customers for the quarter period.
  • 9 Million active users for the period, Q1’2013 with 13% increase on year on year basis.
  • 17% growth rate, representing 68% of the total GMV.
  • Paypal observed 5 Million active registered users in Q1’13.
  • Transacted $41 billion, representing 21% growth rate of the total payment volume.
  • GSI, witnessed 16% year on year growth in same store sales for the period.

There is fierce competition in this commerce industry including all online and offline retailers, wholesalers, auctioneers and shopping networks posing threat to them. But eBay’s growth strategy is believing in it’s business and platform including:

  • Ability to attract buyers and sellers.
  • Volume of transactions and price and selection of goods.
  • Customer service and brand recognition.

Learning:

Although it is exciting to see that eBay has optimized their business, but it’s competitors still have ample opportunity to compete with them by bringing better customer experience management and value offering to their customers, making this market very competitive. EBay, must constantly focus and improve on buyer experience and seller economics, improving trust and safety, extending product offerings into new formats, categories and geographies, and implementing innovative pricing and buyer retention strategies.

Image Credits: Google

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