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Business News/ Companies / Ebay turns 20: From auction house to marketplace
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Ebay turns 20: From auction house to marketplace

A look at how eBay has evolved over the years, and why it is struggling in the Indian market

EBay’s marketplace model is something that has been quite an inspiration for the latest crop of e-commerce websites in India. Photo: BloombergPremium
EBay’s marketplace model is something that has been quite an inspiration for the latest crop of e-commerce websites in India. Photo: Bloomberg

EBay, one of the pioneers of global e-commerce, turns 20 today. The company was founded by French-born Iranian computer programmer Pierre Omidyar in September 1995, a time when start-ups were still not the flavour of the street. Back then it was called AuctionWeb and was renamed eBay in September 1997. A look back at the milestones in the history of eBay, to understand its evolution from an auction site to the marketplace we see today.

AuctionWeb’s first sale was a broken laser pointer that Omidyar himself had put up for sale. It fetched $14.83, and was purchased by someone who collected laser pointers.

In 1997, Beanie Babies collectables were a rage. Around $500 million worth of these cuddly soft toys were sold on eBay, which the company said was more than 6% of all sales.

In September 1998, eBay announced that it already had 1 million registered users.

In July 1999, eBay opened web stores in Germany, Australia and the UK. It has a presence in 180 countries globally at present.

It was in June 2001 that the big change from just being an auction site to a proper shopping store happened. Known as eBay Stores, users were allowed to set up their own digital store to sell products. Anyone from a small business owner to a large corporation selling expensive stuff could sign up.

To enhance the payment options for users, eBay acquired online transaction service PayPal in July 2002 for $1.4 billion in stock. Perhaps it was an admission that its own payment setup over the years wasn’t robust enough to handle large volumes. By 2014, PayPal payment volumes exceeded $60 billion. In 2015, PayPal was spun off into a separate company.

In March 2011, eBay was named one of the world’s most ethical companies by the Ethisphere Institute, for the first time, and stayed there till 2014.

EBay currently has 25 million sellers registered on the platform globally, and there are more than 800 product listings for sale at any given point of time. There have been some very weird sales on eBay over the years. Justin Timberlake’s half-eaten sandwich was sold for $1,025 in 2000, a time when pop music bands such as NSYNC were popular. In 2002, the privately owned town of Bridgeville in California was sold on eBay for $700,000. The owner put it back up for auction, eventually earning $1.25 million in 2006. In February 2006, a Frank Mulder-designed giga-yacht was auctioned off for $168 million, purchased by Russian billionaire and Chelsea football club owner Roman Abramovich. But, singer James Blunt pretty much takes the top step for this one—he once put up his sister, Emily Blunt, for auction on eBay. He later went on to tell the British newspaper The Guardian, “She basically had a funeral to go to in Ireland and the planes were on strike and the ferries were out of season. So I put on eBay: ‘Damsel in distress needs knight in shining armour to get her to this funeral on Saturday. What can anyone do?’ And these men bid and bid and bid and the winning guy said: ‘I can do this, I’ve got a helicopter.’ Anyway, now they’re married, they have been for five years and they’ve got two kids together. He’s got some dough, he’s got a chopper, he’s a great guy. They named both their kids after types of helicopter."

EBay’s marketplace model is something that has been quite an inspiration for the latest crop of e-commerce websites in India. The likes of Flipkart, Amazon and Snapdeal have all followed this model to their advantage. In a marketplace e-commerce store, the idea is to provide a platform for sellers to push their products out to consumers. The more sellers there are, the more the competition.

However, the rise of Flipkart and others has really hurt eBay.in. As per Morgan Stanley’s report in March 2015, Flipkart has cornered 44% of the e-commerce pie in India, with Snapdeal at second place (32%) and Amazon.in lagging a fair way behind with 15%. eBay falls under the ‘others’ category, which combine to corner 9% market share. One of the reasons for this is the amount of funding that rivals have been able to get. According to research firm PwC, Flipkart received $210 million investment in May 2014, $1,000 million in July 2014 and $700 million in December 2014. Snapdeal also received a combined $921 million in funding through 2014. It is that sort of money which the old guard don’t have, and that is hurting the likes of eBay and Amazon in the fast growing e-commerce space in India.

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Published: 04 Sep 2015, 11:08 AM IST
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