With the news that the UK is eBay’s fastest growing territory there’s been some interesting discussion on just how big eBay is in terms of sales and visitors. Of more interest of course is how much bigger could eBay grow in the UK?
Gary has run some rough figures based on an item selling on a mobile device every second. Mobile accounts for 10% of eBay UK sales, so that works out to around 864,000 total sales a day, or 1 sale per day for every 6.5 of eBay’s 17 million unique monthly visitors to eBay.
There are only three ways eBay can grow and the most obvious two are to increase the number of sales per user and secondly to grow the number of users.
Growing eBay UK Users
eBay have 17 million unique visitors each month, but there are only just over 60 million people in the UK. Roughly 20% of the UK population are below the age of 16 so that gives us a total available eBay user base of 48 million to work with.
There is a small but significant part of the population, like my dear mother, who simply don’t and won’t use the Internet for anything. No matter how much I offer to set her up with a free laptop and Internet connection she’s just not interested.
Many families share an eBay account and eBay can’t easily distinguish between a husband and wife logging into the same account on the same computer. I also know many families with children over the age of 16 who still use their parents eBay accounts rather than their own. You can probably divide the 48 million available users in half to get a reasonably accurate estimate of 24 million as the total potential monthly users for eBay.
Now that we’re down to about 24 million potential users, eBay’s 17 million unique visitors per month starts to look close to saturation point. There simply aren’t that many more available users in the UK to log on to eBay as 70% of the available population already do.
Growing eBay Sales
This is the one area that eBay have been focussing on for the past five years. This is the reason it was so important to stop upsetting buyers by allowing sellers to leave them negative feedback. This is the reason that eBay created Top Rated Sellers and attempted to guide buyers to sellers who provide great service.
eBay simply can’t afford to have unhappy buyers and do and must continue to ensure every sale on eBay results in a happy buying experience. This is also why they run programs to reactivate dormant buyers with mailings and discounts from time to time. There could be as many dormant eBay buyers out there then there are potential brand new buyers to the site!
There are still a number of buyers out there who don’t buy on eBay, often consumers who buy on Amazon do so exclusively and won’t touch eBay. This is why eBay have been focussing so heavily on Outlets and Daily Deals to attract the few non-eBay customers out there to the site to make their first purchase. Once a new buyer has made their first purchase they’ll often go on to buy from other non-outlet eBay sellers but the potential numbers of new customers are still limited compared to the 17 million already using eBay.
Cross Border Trade
The final way for eBay UK to grow is to look outside the UK. Cross border trader gives access to a new pool of potential customers and this is more important to the UK than to any other eBay territory in the world.
The two biggest eBay countries – the US and Germany – still have plenty of room to grow to catch up with eBay UK’s market penetration. The UK market is saturated through so to continue growth selling overseas is the only way to increase sales.
eBay are likely to continue efforts to encourage sellers to list with overseas shipping and to display UK listings on sites like eBay.com, eBay Germany and eBay Australia. By supplying UK located products into countries where there is a shortage of inventory in certain categories they can continue to increase demand for sellers.
Switch from offline to online retail
There is still room for online retail as a whole to grow within the UK. Internet sales for January 2012 were about 11.9% of all retail sales, that’s an increase from around 8.9% of all retail sales in January 2011. The general switch by consumers from offline to online should assist eBay in growing sales, but this in itself won’t be sufficient to deliver the growth figures they and sellers need.
Technology enabling buyers to buy anywhere on any device and the blurring of online and offline commerce will grow online sales and this is why eBay are investing so heavily in solutions for the future.
How can eBay UK grow users and sales?
eBay need to hold on to every buyer they have, they need to attract the relatively small proportion of the population who don’t already use eBay and they need to increase cross border trade. eBay will grow as online commerce grows, but their aim has to be to grow faster then eCommerce as a whole.
Currently they are succeeding, but this task will become harder and harder in the future and ultimately cross border trade offers the biggest potential to keep online traders happily selling on eBay.
Disclaimer: All of the figures used in this article are best estimates unless otherwise indicated and should not be relied on for accuracy
17 Responses
Slight correction Chris. The 864,000 sales are the daily figure. X30 to give the monthly figure = 26m sales per month.
I wonder how many of these unique ebay.co.uk visitors are from outside the UK?
I know I visit ebay.de ebay.it ebay.fr ebay.es ebay.com and ebay.au on a fairly regular basis and do buy from these sites.
One way eBay could grow is by increasing the average transaction value, IE get more money per sale.
A marketing campaign highlighting that eBay is the place to get unusual items or things that you can’t find on the high street, instead of just saying ‘eBay is the cheapest’, push the fact that eBay is diverse and different, not ‘cheap’.
I have no idea what internal competition there is between the various ebay sites. Clearly poaching sales from other ebay sites and encouraging buyers worldwide to visit ebay UK has to be a big traffic and potential sales booster. After all the UK has a wealth of riches to export.
ebay UK should encourage more sellers to ship overseas and open up visibility. To be fair ebay have done this recently so they are on the right track here. eBay should offer inducements and incentives to sellers who offer to ship overseas.
The outlets and mall type sellers generally are extremely poor in this regard with very few if any shipping outside the UK.
Search – for those visitors from outside the UK the search result should only include those items that can be shipped to that visitors destination. I don’t know if this is already the case.
I think this article is remarkably simplistic and doesn’t reflect real life.
You use the phrase ‘number of sales’ by which I guess you mean something like ‘average sales value per user in a given time period’. I link that’s what you mean…
But in fact this gives a false or actually no insight into actual behaviour. As a metric it’s just counting money by ebay but as customer behaviour goes, it means nothing since the false assumption is that ‘average’ is how people behave.
In fact no one is an average person (one or more may be by mathematical fluke but that just a function of howe finely not not you measure).
People may or not follow behaviour following certain pattern that could be measured, perhaps on segmentation of their market by one way or another.
It’s by segmenting their customers where any insight about what you describe may follow not on any cumulative view you suggest.
One large segment of Ebay’s market Ebay could take a good view on is regular former or current sellers, who’s own buying volumes would have plenty of scope for going up or down.
I’m sure there’s many other segments of Ebay customer you could think of where you could tkae a view on growth potential too.
Not all can be equal!
worth examing
We’re talking about millions of people. There are dozens of ways to skin that many cats.
– Persuade buyers to buy one more item a year than they do.
– Coax buyers to change behaviours and move beyond a ‘comfort’ category. It is transformative if a serial CD buyer usually spending a few quid then goes on and buys an iPod.
– Reactivating lapsed and inactive buyers is doubtless a big challenge but also a big opportunity.
– Effective cross-merchandising is a option for upping the average spend per visit per user.
eBay’s problem is not that nothing can be done, but that so much is possible. especially as mobile commerce burgeons.
I don’t think they make enough of email marketing. I get so much email regarding fashion from them… I tend to buy books, postcards and other items. That needs a massive refocus on me, not on the company’s strategic priorities.
It is not just about eBay helping itself to grow.
It is also about how we can help ourselves to grow within the ebay empire. After all if we grow then ebay grows. Accepting that ebay do throw a lot of grenades our way (maybe without even realising at times!) how can we work around this?
What follows may be old hat covering the basics to Tamebay vistors and this could be teaching a chicken to lay eggs time but here goes with a few things:-
Go international. Lots of evidence here that this is a BIG sales booster.
Have an ebay store. I’m still amazed at the number of sellers who have large numbers of listings yet won’t fork out the £15 a month for even the basic store. An ebay store gives a credibility boost and works if it is laid out right (check competitors and use the best of the best ideas for your layout! Obvious but how many do this?).
And the store header and store menu appear in your listings givings buyers multiple click through opportunities.
And point to your ebay store multiple times within your listings and tell punters in your listings that you have more of the same in your ebay store. Encourage multiple buying.
Have a mix of BINS and auctions. Don’t sell by auction only which a lot of sellers appear to. Use BINS for standard stuff and auctions for sought after stuff which you know will attract a lot of interest. Auctions drive traffic to BINS.
As a seller, what matters to me on ebay is my profitability. That’s a combination of sales volume and margin.
Ebay doesn’t care about my margin, but it likes volume because of the FVFs.
All of ebay’s acivity is therefore designed to boost volume, even at the expense of squeezing sellers. Unless they do something which recognises that many buyers also sell, the only bit of ebay that will grow is the “me too” items competing only on price.
Perhaps if they dropped the extra charges for international promotion, then the international sales numbers would pick up..
Oddly enough, I do not pay any extra for international listings, but a good third of my sales are overseas. The listings do get placed on search results, it’s just that they only go to the top if you pay the extra. So if you are selling anything sufficiently rare, international buyers will still find it.
Still, though, if eBay do want to boost international sales via eBay UK, then they should drop the extra charges.
I know that the online postage printing service has had its problems, and I also know that people have had problems with the impatience of sellers halfway round the world that complain about delivery times.
eBay can address this easily too (are you listening, eBay? Of course not….) simply by allowing the buyer no DSR on delivery time (we all know it has nothing to do with despatch time).
And let’s face it, buying postage online beats queuing behind all the dorks who have forgotten to buy their road tax and are still clogging up the counters on the tenth day of the month. (Shouldn’t these people be getting fined, btw? 😉 )