eBay's strategies for the UK Operations
eBay Inc. is an American consumer-to-consumer online auctioning corporation that manages eBay.com.
The company was founded by Pierre Omidyar, a French entrepreneur in September, 1995 as AuctionWeb. Separate eBay sites such as eBay UK allow users to make transactions in local currency and eBay.co.uk sees over 22 million unique visitors per month.
E-Commerce Market in the UK
The UK's e-commerce market has maintained its impetus through the recession and remains the largest in Europe. According to a study found, UK consumers spent $59.7 billion online in 2009.
This phenomenal growth in e-commerce over the past decade can be attributed to the following factors:
- More and more consumers are embracing the online shopping platform for the consistency in choice, value and convenience that it offers.
- With a substantial growth in internet penetration the number of online shoppers has almost doubled from 16 million in 2003 to 31 million in 2010.
- Mobile commerce is presenting enormous opportunities to the industry. A recent IMRG survey revealed that nearly 15% of online users access the internet via mobile devices and predicted that nearly 41% retailers plan will have a transactional mobile site or application in place within the next year.
- The impact of social media in influencing e-commerce cannot be discounted. In an effort to increase their exposure to a wider audience, nearly 40% of UK retailers had a social media presence in 2010.
Apart from major e-tailing brands, eBay is likely to face stiff competition from Rakuten ? A massively successful Japanese auction site with over 64 million registered members- which has recently bought US based Buy.com that has a base of some 14 million registered members and has its operations set-up in the UK as well. The deal will help Rakuten strengthen its position in the Western markets.
eBay's Recent Strategies in the UK Market
In the UK mobile has grown over 260% in 2010 and tap the mobile e-commerce market, eBay has introduced strategies such as acquisition of Zong, RedLaser and Critical Path Software. eBay is the leading mobile marketplace in the UK with 1 item purchased every 2 seconds.
The company's StubHub ? secondary ticket market ? will open to the UK marketplace by the end of 2011. It will be the 4th major company in a relatively small UK secondary ticket market and is likely to face intense competition.
The company has been focusing on verticalization in the UK market by starting on fashion which is EU's strongest growing category. eBay.co.uk has 4 million unique visitors a month to the fashion category and most of the items ? 61% globally - are sold at a fixed price, rather than at an auction price.
eBay is growing at 19% y/y in the UK as opposed to 15% y/y overall growth seen in the UK market. It now remains to be seen how eBay will tackle increasing competition in the UK market to maintain its leadership position and take advantage of the upcoming opportunities.