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EBay unveils strategy to expand online sales formats

PHOTO: AFP

EBay Inc, the largest Internet auctioneer, is expanding into different Web sales formats as buyers and sellers increasingly use multiple marketplaces, chief executive Meg Whitman said at the company's annual conference.

Whitman, noting the company is now in the online classified business outside the US and is in the process of buying a comparison shopping site, said the Internet is evolving as online shopping becomes more mainstream. She said sellers that started small and now are established businesses on EBay are looking for other sales venues.

"We want to evolve right along with you," Whitman said in a keynote address to the more than 11,000 EBay users attending the conference in San Jose, California.

"As your business expanded, many of you are looking for opportunities off of EBay. And why wouldn't you? You are smart business people," she said.

In the past year EBay bought a 25 percent interest in Craigslist.org, a San Francisco-based classified selling site and began its own classifieds sites outside the US under the Kijiji name.

"As your business expanded, many of you are looking for opportunities off of EBay. And why wouldn't you? You are smart business people."

Meg Whitman, EBay CEO

It also bought Rent.com for US$415 million in February to gain more of the market for real-estate rentals, and earlier this month EBay announced that it was buying Shopping.com Ltd, a comparison shopping site, for US$620 million.

"E-commerce is changing and many of you are changing as well in the way you use the Internet and the way you buy and sell online. We want to evolve along with you, making it possible for you to expand your businesses however you think best," Whitman told the annual conference.

Whitman said EBay's main marketplace will remain its main focus and that the new businesses help with its mission of making sellers successful.

EBay's sales growth has been slowing, with the company increasingly relying on international sites and PayPal to boost gains. Analysts estimate that sales this year will rise 33 percent to US$4.36 billion, less than last year's 51 percent gain.

The company yesterday began offering a new service helping sellers set up Web stores that are independent of its marketplace. The stores can be linked to EBay's main site and use the company's PayPal payment system.

EBay executives have long recognized the need to stanch the defection of their best customers -- EBay merchants who pay the company any number of fees so they can sell to the tens of millions who browse EBay's marketplace each month.

Many of those merchants, emboldened by their success at the auction site, are starting to pose a competitive threat to EBay as they open their own Web sites.

Many are reducing the volume of merchandise they sell on EBay, if not ending their participation altogether.

To combat that trend, the company has created a service called ProStores that offers ready-made online storefronts with features like shopping cart technologies and secure checkouts. EBay will charge merchants US$6.95 to US$249.95 a month for a store, depending on the breadth of services a merchant selects. In addition, the company will charge a commission of 0.5 percent to 1.5 percent on all successful transactions.

The move, said Michael Dearing, an EBay senior vice president and general merchandise manager, is an acknowledgment that EBay sellers, large and small, are increasingly looking to sell in many locations.

"That's how they found us in the first place," he said, "looking for an alternative channel for selling."

The company will also be doing more to sign up wholesalers who can provide inventory to sellers, said Bill Cobb, EBay president of North America, in his address.

The company is spending "millions" of dollars looking for ways to have items listed in results from Web search engines, and it will debut new national television advertising in the fourth quarter with a message that smart buyers look first to EBay for value and selection, he said.

Other plans by the company include increasing its spending on customer service for sellers, Cobb said.
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