Analysis of eBay E-Commerce Business Strategy and Application

This report provides a comprehensive analysis of eBay's e-commerce business, specifically focusing on its application and success within the Australian market. It begins with an introduction to eBay's background and its establishment in Australia, followed by an overview of various e-commerce business strategy models, including B2C, B2B, and C2C, illustrating how eBay utilizes them. The report then delves into eBay's specific application of these strategies in Australia, highlighting its market dominance and key features like the Global Shipping Program. The operational aspects of eBay's e-business are examined, breaking down the registration, listing, tracking, payment, and shipping processes. Furthermore, the report conducts a SWOT analysis and applies Porter's Five Forces to assess eBay's competitive environment, followed by a PESTLE analysis to understand the impact of the macro-environment on eBay's business model. The report concludes with a summary of findings and insights into eBay's position and future prospects within the Australian e-commerce landscape.

eBay E-COMMERCE AND ITS APPLICATION
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Table of Contents
Introduction......................................................................................................................................3
Company background......................................................................................................................3
E-commerce business strategy models:...........................................................................................4
Application in Australia...................................................................................................................6
SWOT analysis............................................................................................................................7
The way E-Bay operates its e-business...........................................................................................8
Current E-commerce market environment in Australia:.................................................................9
Porter's five forces.......................................................................................................................9
Impact of the macro environment of Australia on eBay's application...........................................10
Pestle analysis............................................................................................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................13
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Introduction
The E-Commerce business needs the appropriate application of theoretical and practical
knowledge, which help in developing the business models more appropriate and increase the
capacity of the organisation. Therefore; to understand the application of e-commerce business
strategies the organisation eBay E-Commerce which is one of the most successful e-Commerce
business in Australia will be analysed and evaluated in this report. The use of information
technology and appropriate ideas which is the main reason behind the current success of e-bay
will be described in this study.
Company background
In the year 1999, eBay has introduced The E-Commerce business in Australia, the United
Kingdom, and Germany. This organisation is an online retailer and one of the most famous e-
commerce Organisation in all over Australia. The organisation has bought the half.com. After
that, the organisation is associated with the application programming interface for developing
their custom interference and introducing a unique functionality (Bocken, 2017). Following that
in the year of 2001 the eBay store which is mainly customised online business has introduced by
this organisation. Except for the online store the organisation also have online auctions. In
addition to that, the organisation eBay has introduced different GST depending on the type of
seller. For the private sector, 10 % GST is introduced as per the monthly invoice. But the
business seller did not have to pay any GST over the fees. But the business seller needs to have a
valid Australian business number which is already registered for GST (Chang et al. 2017).
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After all, the E-Commerce business eBay able to develop a strong market within Australia by
providing the best quality of information Technology application for buying to paying the bill.
This process has helped eBay in enlarging the market which is also currently working in
connecting various regions of Europe, the United States and the Asia Pacific.
E-commerce business strategy models:
In the current internet age, doing business and reaching customers has become easy. As the
internet has evolved, new types of e-commerce strategies and models have started taking place
(Mangiaracina et al. 2015). There are a number of e-commerce business strategy models that an
organisation can take into consideration by any organisation. Some of it is as follows:
 Consumer to Consumer (C2C)
 Business to the government (B2G)
 Government to Business (G2B)
 Consumer to Business (C2B)
 Government to Citizen (G2C)
 Business to Business (B2B)
 Business to Consumer (B2C)
However, it is important to note these seven types of e-business strategy models are categorised
into two main sections-B2B and B2C. Most of the organisations across the globe are using either
the B2B or B2C models for reaching customers and improving their business performance.
B2C: According to Chaffey (2015), the B2C business model is adopted by organisations to sell
products directly to the customers with the help of their website, mobile application or through
an online marketplace.
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Figure 1: B2C business model
(Source: Vakeel et al. 2017)
Vakeel et al. (2017) remarked that the B2C model is the best business model for doing e-
commerce business. The main reason is that for the last ten years, the use of online purchasing
has increased significantly. Most importantly, the online retail purchase has to increase offline
retail stores in many regions and across many products. For example, technical gadgets like
smartphones have seen increased sales through the online medium. In this method, the customers
directly open the website, marketplace and mobile app and order their selected products where
the customers have a variety of options to pay for the products.
B2B: Business to Business e-commerce model is about selling products or services to businesses
rather than individual customers.
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Figure 2: B2B business model
(Source: Veit et al. 2014)
Here, large corporate houses, small and medium-size organisations buy products or services from
other corporate houses or SMEs (Veit et al. 2014). In this method, buyers and sellers buy
products or services either through online auctions or through the online marketplace.
From the above analysis, it can be said two types of e-commerce business strategy models are
mainly there. However, it is important to note that whether a company is operating through B2B
or B2C strategy, they need to take up methods like wholesaling or warehousing, drop-shipping,
white labelling etc. (Chaffey, 2015).
As far as the current chosen organisation is concerned, E-Bay follows a different e-commerce
model than other competitors like Amazon. E-Bay operates through both B2C and B2B method
in the Australian e-commerce market. Through B2C, it sells products directly to the customers
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whereas it sells products to companies in large quantity. Moreover, there is a Consumer to
Consumer method applied in the organisation where consumers can buy products directly from
other consumers who list their products in E-Bay for selling.
Application of E-commerce strategy by E-Bay in Australia
In the Australian market, the application of e-commerce organisation is increasing because the
international sailors can easily get access to entering the local market. Similarly, the biggest
retail E-Commerce organisation in Australia eBay is dominating the online market. There is
another e-commerce business in Australia, but eBay Australia is dominating for the last 18 years
(Chen et al. 2016). According to the records of the eBay, it is the fifth most popular website.
Except that, the organisation is associated with the responsibility of sailing more than half of the
total retailing sales in the country in which food is not incorporated. In addition to that, the
records also show that more than 11 million Australian are visiting the website every month.
This E-Commerce organisation is mainly developing the information system user-friendly where
the seller can easily use this website for entering the Australian market. This organisation also
gives the international sellers an opportunity to establish trade across the border without any
difficulties. This application has some key features; such as the Global shipping program is
flexible and focuses on international distribution process management. In addition to that, the
listing up gradation procedure application within the website of eBay help in developing the
visibility of the products sells through eBay. eBay also have charges for every product plus costs
around 10.9%. If the organisation can sell more than 40 products within the time period of 1
month, the organisation has developed a strategy to give a special competitive price for the
marketplace of the organisation (Latif and Parker, 2014)
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Figure 3: eBay marketplace margins
(Source: Latif and Parker, 2014)
The way E-Bay operates its e-business
The business model of eBay has differentiated four different steps, and it is simple which is the
main reason behind the active application of eBay on it’s the competitive market of e-commerce.
Register- the registration process is straightforward and takes a few minutes. For becoming a
seller in eBay the ‘sell, your item' has to click by the seller which is a free procedure.
Sell your item form- in this process guidelines have to follow for successfully selling the item
through the website. In addition to that, the price of the item, the payment method and the
shipping cost with a photo has to choose from the seller (Zott and Amit, 2017).
Track your items- the uses of eBay has their page named as my eBay for actively tracking the
orders. In addition to that, every item has their tracking activities which include both the bidding
and selling activities.
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Payments and shipping- after listing are successful the shipping address, and payment methods
for the buyers have to select. For the online payment options security process has already
developed by the eBay E-Commerce organisation.
Ebay is mainly adopted from the internet strategy used for the application of this organisation.
To understand the application of this organisation the appropriate market situation of this
company needs to know by the competitive analysis. The model of Porter's five forces will be
appropriate for this process (Chang et al. 2017).
Current E-commerce market environment in Australia:
SWOT analysis
Strengths Weakness
 Did not have a strong competitor in the
internet market of Australia
 The leading Australian E-Commerce
business
 The economy of scale is strong
 High-quality brand reputation among
Australians
 Customer friendly payment system and
website
 The terms of localisation are impressive
according to the customers
 High fees for few areas
 Did not have a further growth strategy
Opportunities Threats
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 The number of Shoppers is growing
every day
 Number of the Online store for other
countries
 Became meaning retailer in the
Australian market
 Can enhance the product profile and
services by the process of acquisition
 The most of the online process is not
adequately secure (Snihur et al. 2018)
 The introduction of Amazon in
December of 2017 is increasing the
market competition
 regional online retailers are selling the
product at a low cost
 The exchange rates are changing over
time
Porter's five forces
Rivalry among existing competitors- eBay is the leading E-Commerce business Australian
market, but the introduction of Amazon which is also the leading business in the E-commerce
market except Australia has created rivalry situation in this E-Commerce business.
Bargaining power of the suppliers- the supplier of this business is not very effective because
there are thousands of suppliers working in this e-commerce business.
Bargaining power of the buyers- The bargaining power of the buyer is very important because
the total business is dependable on the activities of the buyers.
The threat of substitute products or services- the threat of substitute products and services is
common in this retailing industry of e-commerce, and it is increasing every day, but as the
leading E-Commerce of Australia, eBay can minimise the impact (Bocken, 2017).
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The threat of new entrants- the threat of new entrants is not new for this business of eBay the
number of regional E-commerce business are increasing which is creating threat because of their
low-cost strategies.
Impact of the macro environment of Australia on eBay’s application
The macro environment of the Australian market has effected on the application of the eBay,
business model. For understanding the microenvironment and its effect the use of pestle analysis
will be useful.
Pestle analysis
Figure 4: sales of eBay in Australia
(Source: Chen et al. 2016)
Political factor- For the application of eBay, political factors are essential because the
Government of Australia provide the proper structure of business Essentials and also include the
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taxation for this E-Commerce organisation working under the regions of Australia (Chen et al.
2016).
Economic factors- the economy of Australia is ever-changing, and The E-Commerce
organisation has to pay the specific amount of charges to the government. The economic
inflation rate and GDP contribution rate effects on the business application of eBay when it
changes.
Social factor- the social factor is associated with the lifestyle of the Australian population. For
the last 18 years, the Australian population has accepted the business procedure of eBay.
Therefore, it is beneficial for the business and its application.
Technological factor- The technological advancement is the main reason behind the application
of eBay. The advance payment option and the website infrastructure development has affected
the application of eBay (Latif and Parker, 2014).
Environmental factor- The environment has affected various business procedure, and The E-
Commerce business like eBay is also one of them. For maintaining the sustainability of the
Australian environment, this online processes usage are reducing the effect of the various
environmental degradation process' Which is not possible for normal retailing business.
Legal factor- the legal factor is very affecting on this business process application. eBay has to
pay the specified amount of taxes depending on the laws of Australia which is affecting on the
business. For the small companies' the high rates of percentage providing are problematic, and
therefore the new entrants are getting more attention (Snihur et al. 2018).
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