Comprehensive Analysis of eBay's Business Performance and Strategies

This report provides a comprehensive analysis of eBay's e-commerce business, examining its strategies, performance, and challenges. The report begins with an overview of the e-commerce industry, highlighting its continuous growth and the increasing preference of consumers for online shopping. It then focuses on eBay, analyzing its efforts to enhance customer experience through improved services and delivery times, and its continuous innovation in offering new tools for sellers. The report also addresses the critical issue of data security, detailing the impact of data breaches on eBay's revenue and brand image. The analysis includes a review of sales turnover data and a discussion of the negative impacts of data breaches and fraudulent activities. The report concludes with recommendations for eBay to improve its security systems, protect consumer data, and maintain a competitive edge in the e-commerce market.

Statistics

Executive summary
The eBay is operating in the online industry by offering an opportunities for customers or
buy or sale the variety of products and services. In this context, the continuous innovation of the
business facilitates to improve the experience of consumers. The major innovation is being
brought in the technological innovation and marketing field which proves to be effective for
business to reach large mass of consumers. Yet, the issue related to data security affect the brand
image to a great extent. This is because hackers stolen the information of customers dealing on
the eBay portal. This loses the trust of the buyers and the brand was criticized by its users.

Table of Contents
INTRODUCTION...........................................................................................................................1
OVERVIEW OF THE INDUSTRY................................................................................................1
ANALYSIS OF EBAY....................................................................................................................2
Focusing on enhancing customer experience..............................................................................2
Continuous innovation.................................................................................................................3
Insecurity of customers data........................................................................................................3
CONCLUSION & RECOMMENDATIONS..................................................................................5
REFERENCES................................................................................................................................7
List of tables
Table 1: eBay sales turnover............................................................................................................4
List of figures
Figure 1: The growth of ecommerce user in Australia....................................................................1
Figure 1: Sales and revenue declining graph of eBay.....................................................................5

INTRODUCTION
In the current trends, the e-commerce businesses are continuously increasing and several
of companies use the different strategies to become competitive in new trend (Wallace, 2019). In
this regard, the present report is based on analysis of one of the popular e-commerce sites eBay.
For this purpose, the present report sheds the lights on some positive aspect of eBay.
Furthermore, the issue for which company has been criticized has also been analyzed and some
recommendations have also been provided accordingly.
OVERVIEW OF THE INDUSTRY
In the contemporary era, e-commerce industry continuously growing due to changing
lifestyle of public because they prefer to buy products and services at homes (Wallace, 2019). In
this regard, the use of e-commerce in Australia is continuously increasing.
2014
2015
2016
2017
2018
2019
2020
0 2 4 6 8 10 12 14 16
11.3
12
12.5
13
14
13.8
Number of users (Million)
Number of users (Million)
Figure 1: The growth of ecommerce user in Australia
(Source: eshopworld, 2019)
The above figure shows that the use of e-commerce site is continuously increasing and in
future it will maintain the growth as well (refer to figure 1). It is beneficial for those business
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which operates the business on online platform. Several companies predict this trend in advance
and create the strong position in the industry such as Amazon and Alibaba. For ensuring high
competitiveness in the e-commerce industry, companies focus on the uniqueness and
effectiveness of products and services. For instance, the Amazon uses the low pricing and
quality products scheme to attract the more consumers (Pettijohn, 2018). It shows that the e-
commerce industry has high competition which forces the companies to innovate their offering.
Yet, due to continuous growth of industry, businesses have an opportunity for the success of
relative business.
ANALYSIS OF EBAY
The eBay is online marketplace where individual shop and sell products and services. It
provides the interaction of customer to customer. It is a global e-commerce firm operates the
operation in 30 countries by offering valuable products and service to consumers (Magana,
2018). However, the company have some issues in the data security (Chabrow, 2014). In this
regard, the analysis of eBay is consisting below-
Focusing on enhancing customer experience
The firm continuously focusing on the improvement of customers’ experience when they
use the eBay for shopping and selling purpose. For this purpose, it offers an effective place for
the consumers to sell their product through its website. Further, it also considers to deliver the
product in minimum time. The eBay extends three days delivery program and gives the
guarantee of delivering the products in three days (Magana, 2018). It helps the consumers to get
effective services by degrading the waiting time for the orders. In this context, Abd-El-Salam,
Shawky and El-Nahas (2013) asserted the quality of services greatly influence the mindset of
consumer because their perception for the firm is developed on the basis of quality. In this
regard, Nam, Ekinci and Whyatt (2011) asserted that the consumer satisfaction is the foundation
of business success and directly associated with the profitability because the level of satisfaction
influences their future purchase decision. However, the delivery in minimum time enhance the
cost of transportation which negatively affects the profit margin (Hummels and Schaur, 2010).
Therefore, by focusing on the enhancement of consumer experience, the eBay ensures the
growth of business (Annual Report, 2019). It helps eBay to attract more customer and increase
the profit of business.
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Continuous innovation
According to Ngo and O'cass (2013) the innovation is crucial to enhance the competitive
edge of the business because through innovation company offer effective services and attract
more consumers. In the same manner, the eBay also innovates its offering and provide the
valuable services to consumers. For instance, the eBay incorporates the new tool for the seller
such as e-trailer which provides the suggestion to seller for promoting the effective aspect of
products and services (Magana, 2018). Apart from this, the eBay collaborates with sellers and
motivates them for contributing product information directly. For this purpose, it facilitates the
seller to promote their business by placing the add above the search result (Dignan, 2018). The
highest bidder takes the opportunity to promote the business through eBay. Similarly, it helps the
consumers to effectively search on the eBay for the required products and services. Furthermore,
the eBay have more than 400,000 sellers, thus; the positive relationship with the seller increase
the sustainable growth (Dignan, 2018).
On the other hand, the firm uses the data services to improve the sales and also focuses
on the pricing. It helps the business to generate more revenue (Dignan, 2018). It improves the
performance of eBay at the marketplace which was degrading by data breaches. Moreover, the
strategic offering including product and services of eBay is effective to reach out huge mass of
public. It increases the chances of business success because loss in one segment can be recovered
by the success of another segments.
Insecurity of customers data
eBay is constantly dealing with the challenges and issues in the online market because of
insecurity of buyer’s data, frauds, feedback systems etc. Currently, the data of eBay had stolen
by the hackers and third parties to track the records of customers. However, the available data
assures that 0.1% cases are involved in the frauds in case of transactions. On the other hand,
eBay has been criticized by the public due to breaching of data and the sales revenue of the
company goes down by $200 million. In this case, cyber attackers had hacked the eBay
accounts- passwords of the customers because they got the access on eBay corporate network.
These cyber-attacks reduce the sales of the company because 145 million users were affected by
the attacks and scams (Chabrow, 2014).
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The company does not allow the sellers to receive negative feedbacks from buyers to hide
the frauds. On the other hand, in 2008 eBay had commenced an auctions system by using the
mystery box and envelop auctions. These auction systems were fraudulent because it contains to
exciting deals such as winning of cash prizes. But the sellers of the company manipulate the
boxes and shows that these deals are not better for the customers (Theguardian.com, 2019).
Table 1: eBay sales turnover
Year Sales %
2013 8257 19%
2014 8790 20%
2015 8592 19%
2016 8979 20%
2017 9567 22%
Total 44185 100
19%
20%
19%
20%
22%
Sales tuernover of eBay
2013 2014 2015 2016 2017
Figure 2: Sales and revenue declining graph of eBay
(Source: Statista, 2019)
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According to figure 2 showing the sales turnover of last five years, the sales turnover is
varying to a great extent. However, in initial two years it was going down but later it has
increased. This reflects the good sign for the business which may further improve the overall
performance. However, the issues associated with the consumers might have affected their
confidence which is negatively affecting the sales turnover of the business.
CONCLUSION & RECOMMENDATIONS
On the basis of above report, it has been concluded that for an e-commerce business the
consideration on the relation with consumers is imperative for business success. In this regard,
the effective services are helpful to build positive consumer experience which further motivates
for future purchase decision. Apart from this, the innovativeness in the firm offering also plays
vital role in the business success. However, the security of consumers’ data is the main concern
for e-commerce business because any type of data breaches enhances the chances of data misuse.
According to aforementioned analysis of eBay, the poor focus on data security harm the
business to great extent by degrading revenue as well as relation with consumers. To avoid these
types of issue in future, the firm should focus on the upgradation in the security system. Apart
from this, for preventing unauthorized assess only some specific employees should authorize to
work with confidential data. On the other hand, the eBay have its unique offering but it is not
sufficient for achieving leading position in the marketplace. In this context, the firm can focus on
the development of product and can introduce innovative product in market.
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REFERENCES
Abd-El-Salam, E.M., Shawky, A.Y. and El-Nahas, T., 2013. The impact of corporate image and
reputation on service quality, customer satisfaction and customer loyalty: testing the mediating
role. Case analysis in an international service company. The Business & Management
Review, 3(2), p.177.
Annual Report, 2019. About eBay, [Online]. Available at:<
http://www.annualreports.com/Company/ebay>. [Accessed 22January 2019].
Chabrow, E., 2014. eBay Sees Revenue Decline Due to Breach, [Online]. Available at:
<https://www.bankinfosecurity.com/ebay-sees-fewer-sales-due-to-breach-a-7074>. [Accessed
22nd January 2019]
Dignan, L., 2018. Here's eBay's 5-point plan to boost growth, improve customer experience,
[Online]. Available at:< https://www.zdnet.com/article/heres-ebays-5-point-plan-to-boost-
growth-improve-customer-experience/>. [Accessed 22January 2019].
eshopworld, 2019. Economy in the Australian Market, [Online]. Available at :<
https://www.eshopworld.com/blog/australian-ecommerce-insights/>. [Accessed 22January
2019].
Hummels, D.L. and Schaur, G., 2010. Hedging price volatility using fast transport. Journal of
International Economics, 82(1), pp.15-25.
Magana, G., 2018. eBay's marketplace growth regresses, [Online]. Available at:<
https://www.businessinsider.com/ebays-growth-slowing-2018-7?IR=T>. [Accessed 22January
2019].
Nam, J., Ekinci, Y. and Whyatt, G., 2011. Brand equity, brand loyalty and consumer
satisfaction. Annals of Tourism Research, 38(3), pp.1009-1030.
Ngo, L.V. and O'cass, A., 2013. Innovation and business success: The mediating role of
customer participation. Journal of Business research, 66(8), pp.1134-1142.
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Pettijohn, N., 2018. Google And Amazon's Competition Is A Win For Smaller E-Commerce
Companies, [Online]. Available at :<
https://www.forbes.com/sites/nathanpettijohn/2018/09/20/google-and-amazons-competition-is-a-
win-for-smaller-e-commerce-companies/>. [Accessed 22 January 2019].
Statista, 2019. eBay's annual net revenue from 2013 to 2017 (in million U.S. dollars), Available
at: < https://www.statista.com/statistics/507881/ebays-annual-net-revenue/>. [Accessed 22nd
January 2019].
Theguardian.com, 2019. E-commerce: EBay changes aim for fewer critics and more sellers,
[Online]. Available at: < https://www.theguardian.com/business/2008/aug/20/ebay.efinance>.
[Accessed 22nd January 2019].
Wallace, T., 2019. The 19 Ecommerce Trends + 147 Online Shopping Stats Fueling Sales
Growth in 2019, [Online]. Available at :< https://www.bigcommerce.com/blog/ecommerce-
trends/#top-19-ecommerce-trends-of-2019>. [Accessed 22 January 2019].
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