Electronic Commerce EC STAR
www.ebay.com
Team: EC STARMember: Kim, Jong Woo (Techno) Jin, Yong Sun(MIS) Myung, Sung Sin(MIS)
Electronic Commerce EC STAR
www.ebay.com
Why ?
Electronic Commerce EC STAR
www.ebay.com
Most profitable company Most profitable company
Fastest growing companyFastest growing company
Good Business ModelGood Business Model
World wide community World wide community
Fun to Buy and SellFun to Buy and Sell
Electronic Commerce EC STAR
www.ebay.com
JUNE 4, 2001 INTERNATIONAL -- ASIAN BUSINESS
How Yahoo! Japan Beat eBay at Its Own Game
Yahoo Japan
95%($1.6B)
eBay Japan3%
etc2%
Market Share in Japan 2000.12
Market Share in Japan 2000.12
Buying COST On Auction korea ,iBazar
Buying Cost($200M
)
Revenue ($20M)
Source :BusinessWeek
Issue in eBay
Electronic Commerce EC STAR
Agenda
1. Overview of Auctions 2. Overview of eBay
Company Profile Financial Analysis Business Models
3. Introduction of eBay site Auction process Major Services and Features
4. Analysis of competition5. Strategy
SWOT / 5 Force Recommendations
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Electronic Commerce EC STAR
Overview of Auctions
Definition of Auction
“ An auction is a market mechanism by which buyer make bids and sellers place offers “
“ Auctions are characterized by the competitive nature by which the final price is reached “ - JAE LEE … Electronic Commerce the 2nd edition –
Types of Dynamic Pricing
One Many
One Direct Negotiation
Auctions
Selle
r
Many Reverse
Auctions
Exchange
Buyer
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Electronic Commerce EC STAR
Overview of Auctions
Types of e-Auction
B2B
www.ariba.com
B2B
www.ariba.com
C2B
www.priceline.com
C2B
www.priceline.com
B2C
www.amazon.com
B2C
www.amazon.com
C2C
www.ebay.com
C2C
www.ebay.com Consumer
G2C
www.hc-sc.gc.ca
G2C
www.hc-sc.gc.ca
strategis.ic.gc.castrategis.ic.gc.ca
BusinessBusiness
G2B
Consumer GovernmentGovernment
BusinessBusiness
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Electronic Commerce EC STAR
E- commerce Industry Background : The growth of Internet and Online Commerce
Overview of Auctions
• Number of server : 109,574,429 ( 2001.1 www,isc.org )• The number of user : 513.41M ( 2001.8 www.nua.com )• The Total value of global e-commerce transactions : $657 billion (2000) -> $1.2 trillion (2001E) • B2B auctions are forecasted to grow ( Forester Research ) $8.7 billion in 1998 -> $52.6billion ( 2002)
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Electronic Commerce EC STAR
Comparative Estimates Worldwide Total eCommerce
0
2000
4000
6000
8000 eMarketer
International DataCorp.ActivMediaResearchForresterResearchGoldman Sachs &Co.Ovum
2000 2001 2002 2003 2004
Overview of Auctions
Comparative Estimates Worldwide Total eCommerce ( $ Billion)
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Electronic Commerce EC STAR
Company profile
Foundation : September 1995 Location : San Hose , Ca USA Registered Users : 29.7 M ( Nov 2001) Employee : 1,927 (June 2001 ) History
Sep 1995 : eBay was founded in Pierre Omidyar’s San Jose living Room Feb 1998 : Meg Whitman became CEO Sep 1998 : Nasdaq ( $ 18 per Stock ) Dec 1998 : 2.2M users , 33.7M Total items Dec 1999 : 10.0M users, 129.6 M total items Dec 2000 : 22.0M users, 265M items Nov 2001 : 29.7M users 17 Global Sites (Including Korea, Japan, France ,German)
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Electronic Commerce EC STAR
Company profile - Management of Company
Name: Pierre Omidyar Title: Founder and Chairman eBay responsibilities: Oversees strategic direction and growth,
model and site development, and community advocacy. Education: B.S., Computer Science, Tufts University.
Name: Meg Whitman Title: President and CEO eBay responsibilities: Build a successful business while deliver
ing on customer needs and expectations Education: M.B.A., Harvard Business School. B.A., Economics, Princeton University.
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Electronic Commerce EC STAR
MISSIONMISSIONeBay's mission is to help practically anyone trade practically anything on earth.
eBay's mission is to help practically anyone trade practically anything on earth.
MARKETMARKET
eBay enables trade on a local, national and international basis. It features a variety of international sites, specialty sites, categories and services
eBay enables trade on a local, national and international basis. It features a variety of international sites, specialty sites, categories and services
Company profile – Mission & market 2 3 4 51
Electronic Commerce EC STAR
Financial Analysis - Revenue & Net Income
86129
224724
431424
0
100000
200000
300000
400000
500000
1998 1999 2000
Revenue(1000$)Revenue(1000$)Revenue(1000$)Revenue(1000$) Net Income(1000$)Net Income(1000$)Net Income(1000$)Net Income(1000$)
7273 9567
48294
0100002000030000400005000060000
1998 1999 2000
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Electronic Commerce EC STAR
8.4
4.25
11.2
02468
1012
1998 1999 2000
Net Income/Revenue(%)Net Income/Revenue(%)Net Income/Revenue(%)Net Income/Revenue(%) Net Income/Share($)Net Income/Share($)Net Income/Share($)Net Income/Share($)
0.070.04
0.19
0
0.05
0.1
0.15
0.2
1998 1999 2000
Financial Analysis – ROA & PER 2 3 4 51
Electronic Commerce EC STAR
Financial Analysis – Stock Price 2 3 4 51
Electronic Commerce EC STAR
Business Model – reason for eBay’s success
Largest Online Trading ForumLargest Online Trading Forum
Compelling Trading EnvironmentCompelling Trading Environment
Trust and Safety ProgramsTrust and Safety Programs
Cost-Effective, Convenient TradingCost-Effective, Convenient Trading
Strong Community AffinityStrong Community Affinity
Intuitive User ExperienceIntuitive User Experience
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Electronic Commerce EC STAR
Seller Seller
• Browing and bidding
Is free of charge
• Nonrefundable Insertion Fee
• Additional listing options to promote
• Final Value Fee
Business Model
Byuer Byuer
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Electronic Commerce EC STAR
Profit Opportunity in process
Requirement
Deliveryprofit
E-moneyProfit
TradingProfit
Listing Profit
SellingProfit
AdvertisingProfit
Delivery
Payment
Trading
Listing
Searching
2% of Total Revenues(2000)
89% of TR
9% of TR
New profit opportunity
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Electronic Commerce EC STAR
Introduction of eBay 2 3 4 51
Electronic Commerce EC STAR
Auction Process
1. Register
2.Bidding
3.Successful Bid
4.Pay
(eBay Direct Pay /Credit Card …)
5.N
otif
y
6. Notify payment
7. Delivery
8.Delivery Notification
10.Get Paid
9.P
ass
acco
unt
Banking
SellerBuyer
4. Pay ( Check / Money order)
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Electronic Commerce EC STAR
Major Categories
Major CategoriesMajor Categories
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Electronic Commerce EC STAR
Specialty SitesSpecialty Sites
Half.com :The eBay community benefits from a marketplace combining traditional auction-style trading and Half.com's fixed-price trading. Half.com offers an organized online marketplace to buy and sell high quality, previously owned mass-market goods
eBay Stores :eBay Stores expands the marketplace for sellers by allowing them to create customized shopping destinations to merchandise their items on eBay
eBay Motors :eBay Motors is the Internet's largest auction-style marketplace for buying and selling all things automotive
Specialty Sites 2 3 4 51
Electronic Commerce EC STAR
Major services and features
SafeHarbor SafeHarbor SafeHarbor SafeHarbor SafeHarbor is eBay's comprehensive safety resource and protective arm.
Feedback Forum : Check the "reputation" or business practices of any buyer or seller at eBay.
Escrow : Inspect what you buy before sending payment by asking your seller to consider escrow services.
Fraud Protection Program : You are covered for up to $200 on most items - free! (applies to most users, subject to guidelines)
ID Verify : Get successfully verified and sell on eBay.
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Electronic Commerce EC STAR
Major services and features
Authentication ServicesGet a second opinion on your item by using outside expertise.
Verified Rights Owner (VeRO) ProgramMake sure that items do not violate intellectual property rights as there may be liability involved.
Dispute ResolutionAn independent service that provides a neutral place to work out disputes online efficiently and effectively.
SafeHarbor SafeHarbor SafeHarbor SafeHarbor
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Electronic Commerce EC STAR
Billpoint : eBay's preferred online bill payment service that facilitates credit card payment between buyers and sellers
eBay International : Users on eBay represent countries all over the world. With eBay's vision and global business strategy, the company continues to expand its service and brand abroad
Buy It Now :Buy It Now is an exciting optional enhancement for item listings. It allows buyers to buy an item at a specified price without having to wait for an end of an auction
Major services and features 2 3 4 51
Electronic Commerce EC STAR
eBay Professional Services Professional Services on eBay serves the fast growing and fragmented small business marketplace by providing a destination on eBay to find professionals
eBay Local Trading eBay has local sites in 60 markets in the U.S. These localized eBay sites allow users to easily find items located near them and browse through items of local interest
eBay Premier eBay Premier is a specialty site on eBay, which showcases fine art, antiques, fine wines and rare collectibles from leading auction houses and dealers from around the world
eBay Live Auctions Live Auctions provides live, real-time online bidding on items being sold on the sales floor of the world's leading auction houses
Major services and features 2 3 4 51
Electronic Commerce EC STAR
Competitors
Amazon
Buy.com
Yahoo!
MSN
Wal-Mart
Macy’sSam’s Club
Autobytel.com
Dell
Home Depot
eBay’s broad-based competitors include the vast majority of traditional dept and general merchandise as well as emerging online retailers
AOL
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Electronic Commerce EC STAR
Competitors - Yahoo 2 3 4 51
Electronic Commerce EC STAR
Source : Cost Analysishttp://www.alysta.com/software/ebayyahoo.htm June 10, 2001
eBay versus Yahoo for Sellers(1/2)
eBay YahooMaximumDuration 10 Days 14 Days
Ending
Time
eBay auctions end at the time the auction was created
Yahoo allows you to set the ending time within a one-hour range.
Feebased on the starting or reserve price of an item each time an item is listed
not charge any fees for listing auction items to the buyer or seller
Commis-sion
up to five percent of the final closing price fee for reserve auctions
to the buyer or seller when an item is sold
Chances ofBuy & Sell More likely Less likely
When a new Item Is posted
a page for the item gets created immediately,but it can take several hours before the item gets added to the list of items and is searchable
a page for the item is createdimmediately. The item is also added tothe list of items and is searchable immediately.
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Electronic Commerce EC STAR
Source : Cost Analysishttp://www.alysta.com/software/ebayyahoo.htm June 10, 2001
eBay versus Yahoo for Sellers (2/2)
eBay Yahoo
Sniping
Restart
Dutchauctio
n
Response
Restrictions
Counter
A bid is made within the last 5 mins of an auction, it is automaticallyextended by five minutes.
nothing to stop bidders from waiting until the last seconds of anauction to make a bid.
cannot be automatically restartedcan automatically be restarted
Possible, but you must have a ratingof at least ten before you can do this
Possible, not need to have a certainrating before you can create
Not respond as quickly as Yahoo.(browsing, searching, etc)
Better performance than eBay
More restrictions Fewer restrictions
to use another site to place a Counter on your auction item page
able to count without placing aCounter on your auction page
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Electronic Commerce EC STAR
eBay versus Yahoo for Buyers
Source : Cost Analysishttp://www.alysta.com/software/ebayyahoo.htm June 10, 2001
eBay YahooItems Over 6 times more items A lot fewer items
Charging for posting
Yes No
UnusualThing
More likely to find Not have as wide or deep of a selection
SearchTitles or titles & descriptionCan limit within a category
Browsitems
By title or by picture (if designated as part of the gallery )
Space for
pictures
Not provide space for pictures:You must place your picture files On some other site
Provides free space for auction itemPictures, so more items have picturesFor you to see
Titles or titles & descriptionCan limit within a categoryBy title or by picture
Insurance
Automatic insurance for sales
Not offer insurance
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Electronic Commerce EC STAR
SWOT Analysis
First mover advantageFirst mover advantage Large and impenetrable Large and impenetrable market sharemarket share the scale of bidders &sellersthe scale of bidders &sellers No traditional retailing cost No traditional retailing cost structure structure
First mover advantageFirst mover advantage Large and impenetrable Large and impenetrable market sharemarket share the scale of bidders &sellersthe scale of bidders &sellers No traditional retailing cost No traditional retailing cost structure structure
e-Commerce is increasinge-Commerce is increasing Chances for M-commerceChances for M-commerce Possibility to expand high costPossibility to expand high cost productproduct Small competitor’s dismiss Small competitor’s dismiss
e-Commerce is increasinge-Commerce is increasing Chances for M-commerceChances for M-commerce Possibility to expand high costPossibility to expand high cost productproduct Small competitor’s dismiss Small competitor’s dismiss
Simple and easy to imitateSimple and easy to imitate Fraud trading (Trust Issues)Fraud trading (Trust Issues) System Security & reliabilitySystem Security & reliability
Simple and easy to imitateSimple and easy to imitate Fraud trading (Trust Issues)Fraud trading (Trust Issues) System Security & reliabilitySystem Security & reliability
Decrease in growth rateDecrease in growth rate Trust issues between buyers Trust issues between buyers & sellers& sellers Oriented in P2P marketOriented in P2P market Community powerCommunity power
Decrease in growth rateDecrease in growth rate Trust issues between buyers Trust issues between buyers & sellers& sellers Oriented in P2P marketOriented in P2P market Community powerCommunity power
S
TO
W
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Electronic Commerce EC STAR
5 Force Analysis
Bargaining powerBargaining power
of Suppliersof Suppliers
Bargaining powerBargaining power
of Suppliersof Suppliers
Threat of substituteThreat of substitute
Products or servicesProducts or services
Threat of substituteThreat of substitute
Products or servicesProducts or services
Rivalry amongRivalry among
Existing CompetitionExisting Competition
Rivalry amongRivalry among
Existing CompetitionExisting Competition
Barriers to entryBarriers to entry
BuyersBuyers
(GM, HP…)
(B2B, B2C, C2B,off-line…)
(Yahoo, Amazon …)
(GE..)
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Electronic Commerce EC STAR
SERVICE
GLOBAL…
SYSTEM
To Be the World Leader in e-Market PlaceTo Be the World Leader in e-Market Place
BUSINESS
MODEL
Recommendation 2 3 4 51
eBay : 22.0M users, 265M items
Electronic Commerce EC STAR
Recommendation
Back GroundBack Ground Depending on the category of product Incresing of Community power Trust issues between buyers & sellersTrust issues between buyers & sellers
Depending on the category of product Incresing of Community power Trust issues between buyers & sellersTrust issues between buyers & sellers
StratecyStratecy
Things
To
Do
Things
To
Do
Broaden the eBay Trading PlatformFoster eBay Community AffinityEnhance Features and Functionality
Broaden the eBay Trading PlatformFoster eBay Community AffinityEnhance Features and Functionality
Tarket key product categories for special users Develop new community tools Enhance the cummunity for women and old peoples Add new features and services to help trade with greater ease Expand Value-Addes Sevices ( community purchase) Increase the Trust and Safety Programs
Tarket key product categories for special users Develop new community tools Enhance the cummunity for women and old peoples Add new features and services to help trade with greater ease Expand Value-Addes Sevices ( community purchase) Increase the Trust and Safety Programs
ServiesServiesServiesServies
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Electronic Commerce EC STAR
Recommendation
Back GroundBack Ground Growth rate Decreases To utilize the advantages of internet in globalization
Growth rate Decreases To utilize the advantages of internet in globalization
StratecyStratecy
Things
To
Do
Things
To
Do
Homogeneity global market Different strategies to enter new international markets
Homogeneity global market Different strategies to enter new international markets
Enforce Marketing in foreign countries Provide unified site and URL in each country Introduce country-specific services Choose from building solely, acquiring a company or partnering with strong local companis
Enforce Marketing in foreign countries Provide unified site and URL in each country Introduce country-specific services Choose from building solely, acquiring a company or partnering with strong local companis
GlobalizationGlobalizationGlobalizationGlobalization
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Electronic Commerce EC STAR
Recommendation
Back GroundBack Ground Limit of P2P market size Great potential maket of B2C and B2B A new, rapidly evolving and intensely competitive area
Limit of P2P market size Great potential maket of B2C and B2B A new, rapidly evolving and intensely competitive area
StratecyStratecy
Things
To
Do
Things
To
Do
Expand Business Model from P2P to B2C and B2B Good relationship with partner
Expand Business Model from P2P to B2C and B2B Good relationship with partner
Have a partnership with bank, c-card,e-mopney, mobile communication company, google etc Expand gradually Business model from P2P to B2C Develop the ebay’s private brand product.
Have a partnership with bank, c-card,e-mopney, mobile communication company, google etc Expand gradually Business model from P2P to B2C Develop the ebay’s private brand product.
Business Model & Strategic allianceBusiness Model & Strategic allianceBusiness Model & Strategic allianceBusiness Model & Strategic alliance
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Electronic Commerce EC STAR
Recommendation
Back GroundBack Ground 15 System downs between Aug 1998 and Nov 1999 The threat of Hacking ( Deny of services ) The cost of system failure is so big
15 System downs between Aug 1998 and Nov 1999 The threat of Hacking ( Deny of services ) The cost of system failure is so big
StratecyStratecy
Things
To
Do
Things
To
Do
Adapt to changing technologies and industry standard Achieve to stability, availability and efficiency
Adapt to changing technologies and industry standard Achieve to stability, availability and efficiency
Build backup system for important system such as CPU Disk,D/B, Network System, Power, Communication Line Downsize the computer system from Mainframe-level Sun to Win2000 or Linux ( ex: Google has 4,000 Linux server) Acquire specialist for System, DB, Network,Program and etc Invest more money on System Infrastructure
Build backup system for important system such as CPU Disk,D/B, Network System, Power, Communication Line Downsize the computer system from Mainframe-level Sun to Win2000 or Linux ( ex: Google has 4,000 Linux server) Acquire specialist for System, DB, Network,Program and etc Invest more money on System Infrastructure
System InfrastructureSystem InfrastructureSystem InfrastructureSystem Infrastructure
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Electronic Commerce EC STAR
What are the uncertainties in e-biz
Rapid technology innovation in web and mobile: Searching technology/mobile trading
No homogeneity global market: Portal site May be more powerful than eBay.co.xx
Multimedia innovation force much investment: Leverage effect more advantageous to portal
The speed up of the Off-line shop’s innovation: All off-line shop operation on-line shop
e-money payment system will be show to us: They will be most powerful alliance group
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But Our Recommendation will prevent uncertainties
change
Electronic Commerce EC STAR
Summary
eBay Will be the Best e-biz Leading Company
eBay Will be the Best e-biz Leading Company
Electronic Commerce EC STAR
www.ebay.com
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