When Meg Whitman stepped down as eBay’s
CEO in 2008, the brand was showing definite
signs of trouble. In the past four years, under the
leadership of John Donahoe, eBay has experienced
a major turnaround. Unlike its peers
founded in the digital era, eBay has managed to
maintain its culture of innovation — finding new
ways to remain relevant and responsive. The
mega e-retailer has effectively mastered mobile;
in fact, most of eBay’s growth has come from
mobile retailing and PayPal, not its core e-commerce
business (which is also performing well).
As if that weren’t enough, over 90 million users
have downloaded eBay’s mobile app and the
brand is on track to double volume over both
mobile and PayPal this year. Unfortunately for
eBay, it’s not alone in its mobile e-commerce
prowess. Amazon’s customers have also embraced
its mobile app, and the scale of its business
means it can wait out the competition.
Additionally, PayPal is grappling with challengers
like Google Checkout and Google Wallet.
Frustrations from sellers should also be taken into
account. Mounting complaints about escalating
fees, feedback policy issues, the proliferation of
scams, and preferential treatment toward larger
sellers are increasingly threatening eBay’s
relationship with both sellers and consumers.
eBay must take care in managing its reputation,
lest it become a grand purveyor of knock-offs and
junk merchandise. While recent policy changes
have increased relevance and profits, these issues
could signal trouble down the road. The competition
is fierce for online retailers, but with
e-commerce representing only 10% of consumer
spending, there is plenty of room for the king of
online auctions to grow. Considering its current
performance, those who place bids for eBay are
likely to end up ahead.