eBay Inc (NASDAQ:EBAY), post the spin-off of its payments business, is expected to face even tougher competition from market leaders Amazon and Alibaba. Security breaches have impacted traffic on eBay’s market places. And the firm is set to lose more market share in the global B2C e-commerce market.
The new management is taking steps to kick start growth. But the revival remains a work in progress. eBay will likely continue to under-perform the broader e-com market in the medium term.
1. Competition is Rising
Over the past few years, the e-com space has been heating up. New players have emerged in the scene. Brick and mortar giants like Wal-Mart and Target have also upped the ante. Globally, both Amazon and Alibaba have left eBay far behind. Amazon’s Prime program, with express and free shipping, has steadily eaten into eBay Inc (NASDAQ:EBAY)’s market share. While Alibaba’s massive overseas expansion is stifling eBay’s growth in emerging markets. The new kid in the block, Jet.com, is also making things tough. Jet, just a month after its launch, emerged as the fourth biggest player by gross merchandise volume.
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2. eBay Inc’s Security Issues Continue to Hurt
The security issues that hit eBay Inc (NASDAQ:EBAY) last year continue to haunt the firm. Because of that breach, all users were required to change their passwords. That loss of trust continues to somewhat impact spending on its market places. Since eBay has millions of third-party sellers, users are anxious that security scares may crop up again. Buyers are still not confident transacting on the company’s platforms
3. Organic Traffic Declining
Search engine optimization changes at Google are hurting the firm’s organic traffic growth. Frankly, eBay Inc (NASDAQ:EBAY) never was comfortable managing SEO processes. And the recent changes have just made things worse. The firm is said to be working on structured data catalogues to overcome these issues. But don’t expect any quick fix solutions. These processes will take time to yield results given their manual nature. Till then don’t expect any stellar growth in organic traffic.
4. Demography Varying
A younger audience and a demographic shift towards emerging markets have led to a drop in the average selling price on the eBay Inc (NASDAQ:EBAY) platform. Simultaneously, the firm’s performance in higher ASP domains like the U.S. has also recently worsened. Analysts expect these trends to become even more prominent in the years to come.
5. Lousy Changes in Seller Policy
A number changes in seller policy over the last few years has created much discontent among eBay Inc (NASDAQ:EBAY)’s sellers. Competition is increasing, and newer market places are entering. eBay has no option but to keep its millions of sellers satisfied. Without them, the site won’t have healthy mix of products. And this could lead to an even greater loss of market share.