eBay wants to partner with large retailers, not compete with them

eBay wants to partner with large retailers, not compete with them

Summary: eBay is repositioning itself as a technology partner for retailers -- not a competitor -- in a rapidly changing commerce market.

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SAN FRANCISCO -- If there is one thing that eBay executives want to make clear to large retailers, it is that eBay is their friend, not a competitor.

Both eBay CEO John Donahoe and CFO Bob Swan sat down for a keynote discussion at the Goldman Sachs Technology and Internet Conference on Wednesday.

Donahoe started off by asserting that retail and e-commerce are going through a "profound change." He pointed out that last year, the e-commerce was worth $5 billion. Now, he asserted that there is a $8 trillion to $10 trillion opportunity.

"What's happened over the last 12 to 18 months is that the line between e-commerce and retail is coming down," said Donahoe, "It's not just blurring. It's falling down like the Berlin Wall."

Arguably before 2011, eBay was a competitor for larger retailers. But with several notable acquisitions in the last year that has formed eBay's X.commerce platform (comprised of primarily mobile commerce startups and their technologies), eBay is going from what Donahoe described as from "defense to offense."

"We want to become the partner of choice for retailers of all sizes to compete in this new commerce world," Donahoe affirmed. Donahoe admitted that eBay has primarily focused on promoting relationships with small and medium-sized businesses in the past, but now eBay should be considered a platform that larger retailers can utilize.

Donahoe explained that eBay is getting the following requests from retailers:

  • A multi-channel platform because customers want a seamless experience between online and offline shopping
  • A way to handle demand generation (stemming from sources such as Facebook, LivingSocial and Groupon) and also drive traffic into stores (again, online and offline)
  • A way to go global

Most notably, customers want a better of idea of who is going into their retail stores -- a request much harder to accomplish in person than online.

"We are positioning the company as a technology partner for those retailers and we will not compete with them," Donahoe asserted. "We're positioning to help provide data for them."

Swan concurred with the example of the GSI merger, which he posited represents the shift from the connection between the e-commerce and offline worlds, but rather a "web-enabled" market.

"This gives us a dramatic extention of our offering to large merchants in a multi-channel world," Swan said, adding that the size of the market has grown 10 times over in the last year as the e-commerce market evolves.

PayPal has also gotten a significant push with its new mobile commerce and digital wallet solutions, with a Facebook Connect-like integration seen on online stores and then mobile apps for shopping in brick-and-mortar locations. Thus, eBay is working to cover all bases of the commerce scene going forward.

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Topics: E-Commerce, Banking, Enterprise Software, Mobility

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