Mumbai: Jay Lee , senior vice-president and managing director of eBay Inc.’s Asia Pacific business, believes a revolution is imminent in the way Indians communicate and compute, led by tablets below $100 and Internet-enabled phones that cost less than $30. Lee was earlier the chief executive officer (CEO) of broadband provider Korea Thrunet Co. Ltd and then CEO and president of South Korean e-commerce company Internet Auction Co., which was acquired in 2001 by eBay, a $14 billion online-auctions-to-e-commerce company.
In an interview in Mumbai on Tuesday, Lee said eBay India has 5 million registered users (globally, active users are 112 million) and, on average, sees a mobile accessory sold every one minute, a piece of jewellery auctioned every three minutes and a stamp every four minutes. Lee also highlighted some trends, including the exponential growth in buying from developed countries by people in the BRIC (Brazil, Russia, India, China) nations and goods being delivered to the doorstep by eBay, a process that can be monitored on a smart TV. Edited excerpts:
What is the big change you have noticed in the last few years in the Indian e-commerce space?
The growth in mobiles is accelerating beyond our wildest expectations. We have had $13 billion goods traded on mobiles in 2012 globally. The country with the highest penetration of mobiles as a percentage of population is Australia. There is a strong thrust on mobile development, and when we bring it to India, it helps in the massification of portable computing. The sub-$100 tablet will put more and more computing power in the hands of millions of Indians. It is no longer a theory or an idea—Moore’s Law (an observation by Intel Corp. co-founder Gordon Moore that computing power doubles every 18 months) is coming to effect in India. We will have hundreds of millions of mobile users in India. Now it’s imminent, I can feel it. We are already seeing $20 to $30 3G (third generation) phones, lots of sub-$100 tablets connected with cheap 3G and later 4G network, and it’s going to completely revolutionize the way people communicate and compute in India. While you waited five years for a major trend to come over from US-Silicon Valley to India, the wait is a mere six months now. The time compression is palpable. The other big trend is blurring of offline and online.
What does the trend imply?
Before we saw offline brought to online, and we led that trend. In Korea, we bring everyday necessity online. People couldn’t imagine shopping (for) water, diapers, detergents, etc., online. People find it cheaper and more convenient to have it delivered to their house. That was the trend we pushed recently. Now mobile and local (market) coming together is making interesting things happen. When you are shopping on your mobile device, you can search, for example, for an iPad and a map will appear with all the places near you selling iPads, and you can get the price points and the reviews—all this while you simultaneously get the prices on eBay.
You can use this mobile experience to complete the transaction online or offline. You can buy on eBay and you can go pick up the device from a store near you. Store pick up is becoming increasingly popular. One of the innovations we have is “eBay Now”. We first experimented (with) it in San Francisco and in New York. We are rolling it out in as many cities as possible and hopefully we will bring it in Mumbai soon. You order, let’s say an iPad, and it will be delivered to you almost instantaneously. You can watch the delivery person coming to you on your map. So, if you have a smart TV, the whole family can be watching. You decide to buy something and purchase it, there will be a screen with a map, showing the guy coming closer to your house. It is so exact that you can almost open the door when you see the car right in front. We are working with local partners to make this possible.
How are you taking advantage of the growing social networking platform?
With the advent of new technology, we will see group shopping where my friends can virtually join me in shopping. Technology can allow me to superimpose clothing and friends can comment through Facebook like “that doesn’t look good on you, try pink or try V-neck, not round collar. Hey, I want to buy one of those too, pick that up while you are at it”. It is already happening in pockets; we are experimenting with technology to superimpose shoes, sunglasses, etc. Most of it is happening around Silicon Valley, also in Asia in Japan and Korea.
What new features are you planning to introduce in India?
If our experience elsewhere is an indication, we will bring on eBay all the things that users could never imagine buying online. I know many people don’t think of buying perishable fish on an auction site, but they will be able to do so in the near future. They can also buy things not available in India because we can bring them to India. We have declared India to be top priority market for eBay.
EBay also helps promote international trade. What’s the status of that part of business?
Just like mobile is a larger piece of overall transactions, transactions between buyers and sellers from different nations are also increasing. The other strong trend we are seeing is massive purchase by the BRIC markets from developed markets like the US and the UK and that is fuelling a lot of cross-border trade. Whereas before we saw the developing countries’ sellers make money selling in the developed markets—that is still happening and is primary part of our business—it was surprising to discover that small and medium-size businesses in emerging markets, too, are increasingly buying more goods from developed markets. It is exponential growth—(many times) the growth rate of eBay (21% year-on-year in CY2012). Particularly for Asia, we export quite a bit. (Asia’s) importance in eBay’s global business is growing, largely due to exports. India is also growing as fast, if not faster, as China, but from a smaller base—5 million eBay registered users in India.
How do we interpret the bullishness over e-commerce at a time when e-commerce companies in India, especially the organized ones, are yet to make a profit?
The online experience is different. India has all its key elements in place. We expect triple-digit growth to continue for the foreseeable future. In the last couple of years, there has been a confluence of products available online. Logistics has improved, payments have become better and there is higher level of trust. In an economy that is slow, value means a lot. People are willing to trade waiting time for value. This will spur opportunities for both buyers and sellers in India. We will partner with merchants, large and small. Instead of waiting for bricks and mortar shopping malls to be built, this is an easier way to reach cities across the world.