eBay held their annual Analyst meeting on Thursday this week and the company’s future is all about PayPal.
eBay expect PayPal to gain up to 24% of global e-commerce by 2013 which is an incredibly ambitious projection. For the next two years eBay are predicting double-digit annual revenue and earnings growth and forecast revenues to reach at least $13 billion in 2013 compared to approximately $9 billion in 2010. They are confidently expecting PayPal to be bigger than eBay within the next couple of years.
eBay suggest that growth will come from:
- Continued strong global momentum at PayPal
- Sustainable, profitable growth at eBay
- By supporting growth in the two core businesses eBay said they intend to accelerate innovation in emerging mobile, local, social and digital commerce trends. eBay expects mobile gross merchandise volume will double to $4 billion in 2011.
eBay to create an open commerce platform
Interestingly eBay said that they plan to use their global commerce and payments capabilities to create an open commerce platform. They intend to accelerate innovation for merchants – from sole proprietors to large retailers. As a global marketplace, eBay connects buyers and sellers – from casual consumer sellers to large retailers – and does not compete as a retailer with its millions of sellers worldwide.
Open commerce platform capabilities enabled by eBay will help merchants of all sizes compete in a “new retail” environment where online and offline shopping is converging into a seamless experience. Consumers increasingly expect to be able to shop anytime, anywhere, for the best deals and selection on whatever they want.
There are two investments eBay have already made to move down this road – the acquisition of Milo, a local comparison shopping site which when integrated with eBay will give offline businesses the ability to have their products included on eBay, and their investment in Magento which they announced a 49% share holding in.
The direction for the eBay marketplace
The focus will be on fixed price listings and business sellers in the future, so expect higher rewards for Top Rated Business sellers in the future as eBay perceive them to give the best service. They will also roll out a new Fashion hub similar to eBay UK on eBay.com later this year.
The shopping basket will be rolled out more fully on eBay UK later this year but there are no plans to expand it to eBay.com and other sites in the near future. eBay are still figuring out how to integrate auctions into the cart.
Social commerce will be a key focus for the future. eBay are already experimenting with watch lists, but eBay said social commerce is at the stage mobile commerce was about two years ago. eBay plan to lead the way and own the social shopping space so watch for developments in this area for the future.
Mobile, local and social e-commerce
Mobile, local and social are the future for eBay and indeed for the whole of e-commerce according to the vision laid out by John Donahoe. The strategy is to make a marketplace which is available to shoppers on any device and any platform offering the most diverse range of goods both from around the world and those which you can go and collect today from a local retailer.
Crucially of course eBay are counting on one in four global e-commerce transactions being completed with PayPal. Whilst eBay might not be able to grab a quarter of the global e-commerce market they do believe that they can take that share of global e-commerce payments.
12 Responses
I think eBay look at their Crystal Ball with rose tinted glasses. The golden age of eBay is long gone.
ebay (aka JD commerce) predicted to rise by 5% – market place up by 15%.
At this rate in a few years ebay will be totally irrelavant.
corporate hot air
ebay works because it was first on the block and has the financial muscle
“EH”
so expect higher rewards for Top Rated Business sellers in the future as eBay perceive them to give the best service
4 platinum powerseller shooting star TRS ids
and were treat like shit on a shoe
ebay cant fail to treat sellers better
Am I alone in not really understanding a word of it. At the end of the day what will make it in the future is a site that works for both buyers and sellers. Now whatever the jargon is that what ebay is really proposing. If it is I support it. If it is not then in the long term it will fail. I have read numerous postings over the years and the majority say the same thing. That is that ebay as currently constituted has numerous failings. Until those failings are sorted and shopping and selling on ebay is a pleasant experience then the future is bleak.
20% of all goods sold on the internet is via eBay, thats 1 in 5. Google has 80% share of the market and the other search engines the rest. 4 out of 5 internet users don’t seem to use eBay. Surely to expand your business you need to look beyond eBay, open a website and work with the 80% of internet users who don’t use eBay. I’m going to treat eBay as a search engine and a search engine only. This is how Tesco and Argos treat eBay. My main business will from now on be my website. I want the 80% share of internet users who don’t use eBay. None of you are eBay employees, you should be working for your businesses not someone elses. Why not expand in a econmic down turn. eBay is still a good place to trade, but why put all your eggs in one basket?
Agree 100% with the previous comment.
I would like to hear Donahoe’s definition of “open commerce platform” as it will apply to their “plan to use their global commerce and payments capabilities to create an open commerce platform”
I have often wondered how social media could be applied to a platform where direct contact between buyers and sellers is forbidden. Now more food for thought, how open can any platform be with the standard eBay restrictions?
Ebay is still my top online selling platform. Amazon was catching up before Christmas but has fallen back, and my own website is clip clopping along but not quite trotting.
The fact is, Ebay needs to be more like Amazon in its customer focus. Amazon customers trust Amazon but they often do not trust Ebay. They need to separate their Auction and Fixed Price sides more cleanly. They have acted schizophrenically about this over many years now. They need a shopping cart for fixed price goods, and they needed it yesterday. They do not need to incorporate auctions into a shopping cart, at least not to begin with.
From a sellers point of view, an open commerce platform should be an advantage compared with Amazon.
The fact that it has not neccessarily been so is an indictment on Ebay’s lack of vision, its policy of reaction rather than proaction.
If they want to make Paypal the all conquering payment platform, I believe they should concentrate on selling itself more as a straight ahead payment provider. Although as it stands, you don’t have to have a paypal account to make payment, many people do not know this and a customer encountering paypal for the first (or many) time(s) will think they need to sign up for an account. This is not surprising as it is far from obvious when compared to a standard payment system. Like Ebay, many people do not trust Paypal.
Paypal should be less pushy at trying to commit people to signing for an account, it makes plenty from the seller in commission fees. It is really just shooting itself in the proverbial…
Agreed the Paypal user interface looks very outdated.
But the payments service they provide is great.
@Warren – above
You say ebay has 20% and Google has 80%.
Where do you get those figures from?
What about Amazon ?
And what about all the stand alone websites that have regular buyers ?
(But I do agree that we should all be pushing our own websites, I am)