M RahmanSWOT analysis of eBay (eBay SWOT)
This detailed SWOT analysis of eBay aims to provide the readers with a comprehensive insight into the strengths and the weaknesses of eBay. It also aims to examine the opportunities the company should explore and the threats it needs to keep an eye on. eBay Inc. is an American multinational e-commerce company based in California, the USA. It was founded in 1995 by Pierre Omidyar.
Strengths of eBay
eBay is one of the most successful stories of the dot-com bubble. In fact, the two giants that mostly dominated the world of e-commerce until recently are eBay and Amazon. eBay is a fantastic online auction and shopping website and has operations in many countries around the world. Its business model of acting as a middleman between sellers and buyers is fantastic and minimises its operational costs.
eBay has 180 million global active buyers and 1.7 billion live listings (eBay Inc., 2021). Both consumers and businesses can use it to buy and sell a great variety of goods and services. Buyers can use it free, while sellers are charged some fees. It is noteworthy to mention that the prices charged by the sellers on eBay are often far cheaper than those offered on most other online platforms.
eBay’s revenue was worth $10.8 billion in 2019. It also ranks consistently as one of the largest U.S. online companies based on market capitalisation (Coppola, 2021). It has achieved a number of awards and accolades over the years e.g. No 8 on Indeed’s list of Best Places to Work, and one of America’s Most Responsible Companies by Newsweek (eBay Inc., 2021).
Weaknesses of eBay
While there are millions of listings currently available on eBay, the company has somehow developed a negative brand image over the years. Many people perceive eBay as a ‘second hand’ products marketplace. However, it is worth mentioning that eBay has taken a number of initiatives recently to change consumer perception.
Many sellers complain that eBay’s fees for listing items and payment processing are very high and these fees have risen significantly over the years. These high fees often leave the sellers without any profits, and therefore, many of them go out of business fairly quickly. In addition, the sale of counterfeit goods by some sellers has damaged eBay’s brand reputation.
Success is not the only story that eBay can share; it has some stories of failure to share as well. For instance, eBay entered the Chinese market in 2014, but failed badly as it was unable to compete with the local tech giant Alibaba. Likewise, it entered the Indian market in 2004; however, could not create any significant market position till today. Its global ‘one size fits all’ strategy has failed to help it take first mover advantages in the Indian market (Pani, 2018).
Opportunities for eBay
There has been a remarkable rise in the number of people exploring online shopping experience over the years. The increase has been seen in many countries such as the USA, the UK, Canada, and India to name but a few. Consequently, the high streets are dying which in fact offers eBay a great opportunity for further growth and development. The global lockdowns have also pushed people to get acclimatised to the world of e-commerce. Therefore, drawing the attention of new users is certainly worth exploring.
eBay can grow further by adding new countries to its Global Shipping Programme (GSP). Likewise, opening online stores in the countries where it has no operations yet is worth exploring. It should be mentioned that eBay has added many services to its portfolio over the years through acquisitions or through buying significant stakes in some companies. Pursuing similar growth strategies may turn out be very useful for eBay.
Threats to eBay
Threat is the last element to address in the SWOT analysis of eBay. eBay faces a stiff competition from a good number of competitors. Amazon, Alibaba, and Walmart.com are widely considered to be the major competitors of eBay. Likewise, many other online marketplaces e.g. Shopify, BriskSale, StoreEnvy, Poshmark, Jet, Etsy, and Facebook also compete with eBay directly or indirectly. In addition, many regional low-cost online retailers are also causing eBay significant problems.
Online security threat is also a major issue to consider in this discussion. Many online platforms have been hacked over the years. In fact, eBay’s security was breached in May 2014 causing the theft of consumers’ data such as usernames, passwords, phone numbers, and physical addresses
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Last update: 24 March 2021
References:
Coppola, D. (2021) eBay – Statistics & Facts, available at: https://www.statista.com/topics/2181/ebay/ (accessed 24 March 2021)
eBay Inc., (2021) Who we are, available at https://www.ebayinc.com/our-company/who-we-are/ (accessed 23 March 2021)
Pani, P. (2018) How eBay failed to gauge India’s e-comm scene, available at: https://www.thehindubusinessline.com/info-tech/how-ebay-failed-to-gauge-indias-ecomm-scene/article9640407.ece (accessed 14 July 2019)
Author: M Rahman
M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.
