Established in 1995, eBay was one of the original Silicon Valley wonders, and among the few survivors of the dotcom bubble. While globally the company, with annual revenues of $11.65 billion in 2011, is an undisputed success story, in India eBay is still not among the frontrunners in the e-retailing space.
While eBay has been around in India for the past 15 years, at present, six items are sold on eBay every minute. In itself an insubstantial number, it appears even smaller when compared with the more than 20 items sold on Flipkart every minute. Flipkart was started in 2007 and is an e-retailing website. eBay is touted as an auction/ market place, where sellers meet buyers.
Launched against this backdrop, the new eBay campaign, its first since 2008, has the tagline, “Want it get it”. The campaign is as much a fightback strategy as it is a continuation of the last eBay campaign. According to Kashyap Vadapalli, chief marketing officer, eBay, the innate message in the campaign is to highlight the variety on offer to a buyer on eBay.
“When you look at online shopping as a category there are a few things that drive the consumer to buy online. One of the key drivers is the variety available at a click, this is the innate message in the campaign,” Vadapalli explains. He goes on to say that with 25 lakh items across 2000 categories on sale at any given point in time, eBay is the biggest and the most varied marketplace available to the online shopper at present. “We are a one stop shop catering to all of the consumer’s needs,” Vadapalli adds.
The message in the television campaign is simple: that eBay is built on assumptions applicable to all online buying, First, a consumer will be attracted to the variety that eBay has on offer; second, the fact that the consumers irrespective of how and when the consumer buys a product, the idea is to fulfill a need; but at deeper level every consumer in every transaction is fulfilling a certain want.
“These are true for all buying behavior. And this we seek to address, through the tagline of ‘Want it get it’, denoting that any given desire or want that a buyer might have, eBay has the variety to cater to it,” Vadapalli says.
Consider one of the advertisements in the new campaign: A nerdy mustachioed man with a south Indian accent talking about how to land a supermodel girl friend-the wooing process is explained in terms of various gifts to be given from roses to mobile phones to clothes, culminating in a now wooed supermodel on a date with the nerd at a candlelit dinner. The message: there is no end to how much we want. The answer to all these wants is eBay.
“The problem with eBay is that the company missed the growth opportunity presented in the past two years and is now having to make up for lost time,” said an analyst with Angel Broking.
Besides the ad, eBay taking several other initiatives to be reckoned on par with the competition; this includes recently formed partnerships with brands like Bata, FabIndia, Reebok, and Catwalk among others. “One of its bigger strengths, which gives it the edge is the PayPaisa platform, which makes payment simpler for the Indian buyer still unsure of the online format,” says Dilip Shenoy, entrepreneur and financial writer, with a keen interest in the ecommerce segment.
PayPaisa is an escrow-like service, which works because the regulatory mechanism disallows the use of its global payment format, PayPal, in India. Besides this, the company is in the process of engaging smaller businessmen like jewelers on board for its exports platform — a move which will bring it traffic, besides pitting it directly against competitive sites like Alibaba.
The San Jose, California-headquartered eBay earns almost 80 per cent of its business in India from the sale of newly-launched fixed-price products in the consumer durables section, such as mobile phones, computers and laptops, music players and flat-panel television sets and cameras.
This is a marked distinction again, with the new crop of players like Flipkart who have made their fortune on the back of selling books, or in the case of players like Snapdeal and Fashion&You who sell deals and fashion products respectively. All three run on a heavy discount system.
Interestingly, despite the comparisons, the eBay model is replicated in sites like Qickr and Olx.in in India.
“But by engaging products from organised retailers, eBay is now competing with e-retailers across the board,” says Shenoy.
Competition is relentless
Interestingly, market leader and rival Flipkart, which has also recently launched its new campaign, ‘Shopping ka naya destination’, is aiming to address the new audience target, something that eBay did in its 2008 campaign.
“We are trying to expand our target base. The previous campaign spoke to those who were already online. Now we are expanding this to include those who have not shopped online at all. We want to reinforce that online shopping is a trustworthy and reliable channel,” says Ravi Vohra, head of marketing, Flipkart.
According to the CEO of another ecommerce company, who did not wish to be quoted, there are few basic messages that any site will try to send out through a campaign. eBay is playing on variety, others like Flipkart are trying to create awareness for their long term benefits. “They are the market leaders, and the fairytale will continue for ecommerce only when there is adoption in small town India. This is what the new Flipkart campaign seems to be catering to,” he adds. The eBay stand, however, remains that it has addressed the convenience issue in the 2008 campaign. “Now it is about differentiation. The winner will be the one who will be able to offer more variety. The audience is already aware of the conveniences attached to online shopping,” Vadapalli says.
As of now, says eBay, the target is to take the six transactions a minute to 12 over the next year. The online retail market, barring travel, is pegged at Rs 3,000 crore currently and is expected to more than treble to Rs 10,000 crore by 2015.
While eBay does not give country specific numbers, the growth projections can be gauged from the Flipkart claim that from the current Rs 500 crore sales this year, it will grow to Rs 5,000 crore by 2015.
History and market
In 2004, when Ebay.com bought Bazee.com and in the process announced its official foray into India the country had 39 million internet users. Eight years into this foray, the country has gone to about 100 million internet users.
Besides this, other dynamics are encouraging in the internet retail growth as well. According to a report by research consultancy, Technopak, online retail constitutes only 1 per cent of the overall Indian retailing pie. This however, is slated to grow at about 100 per cent.
According to estimates by eBay itself, the growth could be faster. Moreover, the sale of tangible products online till now constituted a minuscule portion of the overall online pie. According to a report by Internet and Mobile Association of India (IAMAI), online retail, touched Rs 47,000 crore in 2011. Of this, 80 per cent was travel. This will fast change, according to industry estimates. “I am bullish on the ecommerce sector. It is the best time to be an online buyer currently because the venture capital is subsidising every purchase,” said Mahesh Murthy, partner at Seedfund, a first stage, venture capital fund.
What Murthy means is this: the new internet buying space is driven by heavy discounts. Ask eBay why these are absent from the site and the view is that eBay offers the best comparative price anyway because it is the marketplace where the seller is putting on auction products without added costs of marketing and infrastructure.
“Compare prices across sites and you will find the prices on eBay to be extremely competitive anyway given the fact that we are just linking the buyer to the seller. Added to this, I do not think this intense discount-driven model can be sustainable,” Vadapalli explains.
For now, eBay is set to sell. Whether the sabse-sasta-loving Indian will buy is the million dollar question.
