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Description: EBay was growing so fast early in its history that Meg Whitman, its former chief executive, liked to joke that “a monkey could drive this train.”

Source: NYTimes.com

Date: Feb 6, 2011

But while eBay’s marketplace revenue grew just 8 percent to $5.7 billion last year, eBay is still losing market share to its rivals, as global e-commerce sales increased 18.9 percent in 2010. Amazon.com widened its lead last year, whileGroupon, the daily deal service, and a number of specialty retailing sites like Etsy began nipping at eBay’s heels.

Mr. Donahoe says he plans to tell Wall Street securities analysts on Thursday at the company’s analyst day that eBay can now “go on the offensive” by building on its early momentum with mobile shoppers and that it will better integrate sister products like PayPal, the online payment service. But he is not expected to announce any major new products or services.     Read rest of story

Questions for discussion:

  • What is Ebay’s competitive advantage?
  • Will Ebay continue to lose market share to its competitors? Why or Why not?
  • What would you reccomend that Ebay do to continue with a pattern of growth into the future?

17 Responses to “EBay Says Big Growth Is Not Over”

  1. brittni.maurer

    The amount of users that Ebay has on the market, being the leading global brand for online auction and having the advantage of having a system that has a automatically suggest a product description creating short cuts for the seller and making it easier to categories their products so that when buyers search a product they will most likely be able to come across products that are similar.
    I think that Ebay will continue to lose market share to its competitors as the market grows and the competitors start to use the same process that Ebay is using there for making Ebay lose its competitive advantage and there for making the playing field a lot more flat. Ebay won’t lose be cut out of the market at any time in the new future they just have to keep coming up with bigger and better ideas to stay ahead.
    Having such high fees when it comes to selling products is a big discouragement to sellers who are trying to make a living off using Ebay as their business, in the future Ebay should look at the fees and make them a little more reasonable for the sellers so that they keep their customer.

  2. Dustin

    Ebay high volume of traffic is their competitive advantage, also the wide veriety goes along with it. They do not focus just on a specific class of products and brands. Almost everything you can imagine. Even some things that you cant imagine are on ebay. another advantage they have is the popularity of the site. most poeple commonly know what ebay is or does.
    I dont think ebay will lose market share to its competitors. They are big enough now and can throw their wieght around. As with the little site trying to start up just dont have the overhead and power it takes.
    Ebay should lower their fees. It is apparent that most everyone that leaves the site to go to another one, does so becuase of the price. if they were to lower thier fees more people would buy and sell there.

  3. Russ

    I think that ebay’s competitive advantage is that fact that they were the first to inhabit this sort of market, that is allowing anyone with an internet connection to have a virtual storefront. They became very popular and they have facilitated the sales of many products in the consumer-to-consumer marketplace. I believe there will be a few who abandon ebay for the simple fact that they do not appreciate paying all the fees involved with selling a product and they may take their commerce else where. However, I believe ebay will continue to adapt and try to compete with the the other companies that compare to them in this industry. There will be other companies that try to lower their fees to attract buyers and sellers, but i still believe that because of ebays sheer size these other companies will have a lot of trouble competing with the variety that ebay can offer.

  4. Derek Wilson

    The way that EBay has been able to capture the market through bargains and make it easy to find exactly what you are looking for is its competitive advantage. I shop on EBay and I just haven’t been able to shop on Amazon simply for the reason that I can’t see the actual product. I am a shopper who is looking for a good deal as well as good quality. I find it hard to put a lot of trust in a seller’s judgment of their product. As soon as Amazon ramps up its use of seller images, I am on board because I love their “explore similar items” service. I believe that many other people like me will switch en masse to Amazon if this happens. If EBay were to compete with these other competitors who are ramping up services, they will need lower prices for sellers. It’s as simple as that.

  5. Simar Duggal

    The competitive advantage that Ebay holds know is that the customers have the ability to look at pictures and descriptions when they need to, the refined usage of pictures for fashion and descriptions for electronics is very customer friendly. Users have the ability to choose a product simarl to the product they are looking at and look for things that are similar. If Ebay does not lower they’re fees’ they will start to loose market share to competitors. The users are beging to see the advantage of lower fee’s as a reason to move to a different online selling company. Ebay needs to keep thinking of innovative ways to keep there buyers from selling on different websites, for example the new “automatically suggested product descriptions” is a good reason for ebay users to stay on or switch to Ebay because it helps them put up products for sale faster.

  6. Katie

    I think eBay will lose some of their market share to the other companies creeping into the business. EBay definitely has competitive advantage and I think a lot of that has to deal with name recognition and the fact that they are the first company people think of when wanting to buy or sell online. But the other companies are quickly following suit to try and steal some of their clientele. I know of several people that have had bad experiences with eBay and the number seems to be growing. I find myself often turning to the other websites first before popping over the eBay. But I think the imminent arrival of the apps for eBay will bring a lot of customers back. It is a great way for customers to see all that eBay has to offer and for eBay to increase their business.

  7. Bretton MacDonald

    EBAY has a great competitive advantage over rival sites because of their brand name and this will lead to higher traffic and therefore better chances of selling your product. People dont want to bring their products to other sites because its harder to sell and even if they do sell their products there not as likely to get the kind of money they want. People complain about all the selling fees but Ebay offers several deals like no listing fees and other deals to sellers which can be very beneficial to sellers. They offer these deals quite frequently aswell. I think Ebay will continue to lose to business to other competition but thats the nature of the business and they seem like they are trying to branch out to others and expand their market. Things like selling last seasons clothes for stores will help their business along with encouraging more Buy Now purchases. I think Ebay will still dominate there competition for many years to come.

  8. Momah Moseri

    Ebay’s high volume of traffic and their broad variety of products definitely gives them the advantage over competitors. Buyers can look at exactly what they want to buy and can determine the genuinity of the seller by looking at feedbacks and how other buyers rated the seller. I don’t think that ebay will continue to lose its market share to competitors. Ebay is a big organization that has many loyal buyers and sellers who love to shop on ebay. Yes it is possible for other competitors to copy from ebay and starting using what ebay uses so that they could benefit their organization and increase traffic on their site but at the level ebay is right now, it only going to take something very attractive and different for loyal customers to leave ebay. I think that ebay should continue to do what they are doing, make sure that buyers are protected from online hackers and prices of products can be reduced.

  9. Rio P

    Ebay definitely has a competitive advantage in name recognition for probably the most common saying is, if you can’t find it anywhere, look on Ebay. The massive amount of goods that are bought and sold on the site gives the company its advantage over competitors. Right now, Ebay is in a maturing stage of the company and its competitors are starting to take a grasp on the market share that Ebay can’t quickly capture or is losing, such as those in the market that refuse to pay such high fees. However, I feel that the market share will equal out and Ebay and competitors but it will not be completely lost to them, for Ebay is such a large force on the internet it would be difficult for them to disappear. I do not think that Ebay will be able to grow like it did when it first started. The growth was rapid as more and more people were joining, as well as there were hardly any competitors. Ebay should plan for mature growth, a much slower yet satisfying means of growth.

  10. Todd McCune

    Ebay’s competitive advantage lies in that they were the first major consumer-to-consumer online retailer. Their name alone as the biggest online retailer gives them a competitive advantage over those sites entering the market as a competitor. Those who have a history of selling on ebay and a good seller rating are unlikely to switch to a different site. The fact that they have over 2 million products as stated in the article is also an advantage over new sites. I feel that Ebay will always be the biggest site of its type and will mostly maintain its market share but it is likely that it may slightly decrease to to new entrants. New competitors will use Ebay as a blueprint but will improve on things that Ebay does not offer or decrease the fees involved which may push some consumers their way. Ebay can continue to have a competitive advantage by continuing to improve its weaknesses and use innovation to stay ahead of the pack such as the barcode scanners that they are currently using. The use of a smartphone app is also a great means of Ebay to grow because people are starting to use their smartphones for online services rather than computers so this feature should allow for some growth as well.

  11. selenanova759

    ■What is Ebay’s competitive advantage?
    ■Will Ebay continue to lose market share to its competitors? Why or Why not?
    ■What would you reccomend that Ebay do to continue with a pattern of growth into the future?

    I would say ebay’s competitive advantage is that of first entry. however i feel it is fading. sellers who once put up with fees because their products were moving are no longer willing to do so since the influx of bigger retailers working through ebay. to be completely honest, although i dont sell on ebay, as a buyer it drives me a little nuts to search for “boots” and have a million products pop up all from the same retailer. no i dont want your low quality products and i’d like to not see them pop up again. ebay will only face futher competition in the future. friends of mine much more involved in online purchases who used to swear by ebay, have moved on to kijiji and other companies i’ve never even heard of. the internet has just made C2C retailing easier and where one company has weakness, another will find a way to take advantage of the dissatisfaction.

  12. Brenda Bicharr

    Ebay has gained competitive advantage over the years which can not really be replaced by its upcoming competition. Even as E commerce spreads around the world and takes over all businesses, people still always need time to get used online websites, especially considering the risk involved in online shopping such as identity theft,money scamming etc therefore, for a company to get to the level of confidence which a company like ebay has, it will take a while. So this competitive advantage, coupled with the fact that Ebay is in so many countries and has explicit descriptions to her goods and services available for sale, her growth in the industry is not a question. Some people currently buy all thier goods from ebay except food stuffs. i have friend who r that way. everyday ebay adds something to her search engine and her business ways. Therefore the growth is apparent.

  13. Taofikat

    Ebay has a lot of competitive advantage over other sites that does e-sales. Ebay won’t lose be cut out of the market at any time in the new future they just have to keep coming up with bigger and better ideas to stay ahead. New competitors will use Ebay as a blueprint but will improve on things that Ebay does not offer or decrease the fees involved which may push some consumers their way.The internet has just made Consumer to consumer retailing easier and where one company has weakness, another will find a way to take advantage of the dissatisfaction.

  14. Nicole Hendry

    Ebay has a competitive advantage as it was the first to gain huge success when e-commerce was in its beginning stages. As a leader in the market it has advantages such as customer loyality, brand recognition and a large market share. I believe that until Ebay finds ways to lower fees for their customers it will lose market shares to its competitors. Sprucing up the site for some was a noticable change, but for others it didn’t make a difference. Putting money into something that isn’t giving Ebay an advantage is better used in lowering fees for customers. I do however think that Ebay’s idea of writing the description for the customers was a good idea and could become a competitve advantage. Lots if people have either a hard time thinking of a good way to word a description, have little time to spend thinking of a description or just enjoy not having to do the extra work to write a description. I feel that if Ebay continues to make it’s site more user friendly and also focuses on lower fee’s it will continue to see growth in its company.

  15. Jatinder Aulakh

    What is Ebay’s competitive advantage?
    Will Ebay continue to lose market share to its competitors? Why or Why not?
    What would you reccomend that Ebay do to continue with a pattern of growth into the future?

    Ebay’s competitive advantage is their name recognition and the customers that like shopping online. Ebay is recognized around world and has become the biggest online selling and buying site. Customers find it easier to sell and buy stuff off Ebay at cheaper and better prices. It is one of the most convenient sites when looking for discounts or trying to sell. Ebay’s competitors are starting to take place in the market, which will make Ebay lose their market share. In order for them to keep their market share higher than competitors, they need to lower the fees online. For Ebay to continue with a pattern of growth into the future they need to keep up with their competition and serve their customers in a better way than their competitors.

  16. Chelsa

    In my opinion Ebay’s competitive advantage is their brand recognition and that they were the first company to offer the ability to sell things to other people online. I do not think I could come across someone in Canada who has not heard of Ebay. Ebay allows people to sell anything and everything to other people online. Ebay used to be a unique company because of this. But, the competition is growing and becoming more fierce. Soon enough their brand name won’t be enough to sustain the company. Ebay has been loosing market share to competitors and I believe they will continue to do so unless they decrease the fees they are charging to sellers. Ebay’s competitors are competing on price and if Ebay chooses not to I do not think they will be as successful as they have been in the past. One thing that Ebay is doing to try to maintain their advantage is coming out with upgrades to the service before their competitors but soon enough those competitors will have the same advancements and technology so that advantage will not last long

  17. Alex Hedges

    Ebay will steadily lose market share over the next short while. Even though Ebay is household name and many people shop there religiously, there are many sites out there that do no cost money to use. Let’s face it, Ebay’s business idea isn’t too brilliant. It is just a site that brings together buyers and sellers. For a site to be successful in bringing buyers and seller together it just needs the right amount of consumer awareness- a lot. Once a well-structured site with no fees gains popularity, it will leave eBay in it’s dust. Why would consumers pay for a service when it is possible to make the same transactions for free? On the company’s side, it is not as if the site will be unsuccessful without the fees. As Google has proven, it is quite possible to be very profitable by relying mainly on advertising for revenue.

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