Retail

EBay is taking the fight to Amazon in the battle of Aussie retail, but the company’s grasp could be slipping

Dominic Powell /

eBay

Source: Tim Goode/PA Wire

Online marketplace giant eBay is taking the fight to Amazon in Australia by a ramping up of its product offerings and services in the last six months — and one expert says it’s working.

EBay has been available to Australian consumers and businesses since way back in 1999 when the primary way to sell was via an auction, and the majority of products on the marketplace were being sold by everyday Australians.

Today, eBay has become a fully-fledged payments provider, online shopfront, and digital marketplace for businesses big and small in Australia, with many local SMEs selling on the platform for years.

But with the launch of online retail giant Amazon late last year, there was some concern that eBay could be knocked off its pedestal, with predictions of shoppers flocking to Jeff Bezos’ $US830 billion ($1.13 trillion) retailer and leaving all other online platforms in the dust.

Come Amazon’s Australian launch in December last year, Australians’ reactions were subdued. Shoppers voiced their disappointment over the range, price, and quality of products available from the local site with many saying the online giant’s offerings simply didn’t impress.

For Australian SMEs, Amazon Australia was also not what it was cracked up to be. Business owners told SmartCompany they had seen less-than-stellar results on Amazon’s small business marketplace, with one seller making no sales after three months, and labelling Amazon “all fizz and no substance”.

Amazon’s recent launch of Amazon Prime in Australia was also criticised, with shoppers only being guaranteed two day delivery times, rather than same-day delivery as is available in other countries. The company’s decision to cut off Australian shoppers from buying physical goods from its international stores due to GST law changes was also protested by consumers.

EBay’s surge in product development

But during Amazon’s troubles, eBay began a rollout of a number of products and services, aimed at getting Australian’s back on side. The company began with a direct move against Amazon, barring Australian sellers from using Amazon’s fulfilment service in May this year.

This was followed in May by the announcement of eBay Plus, an Amazon Prime-like subscription service for Australian shoppers that offers free delivery and returns on a selection of products from Australian retailers for $49 per year. The service was launched in June, which coincided with the launch of Amazon’s Prime service.

Finally, last week eBay revealed it would be enabling price-matching between its online marketplace and local Australian retailers. Applying to all new ‘buy it now’ listings, shoppers who find a better price on the same item at an approved competitor’s store within 48 hours will receive an eBay voucher for the price difference plus 10%, reports Inside Retail.

And as a cherry on the competition sundae, eBay has been rolling out numerous sales events over 2018, including a Black Friday and Cyber Monday event for its eBay Plus members.

Speaking to SmartCompany, retail analyst and industry expert Scott Kilmartin says eBay has rolled out more offerings in the past year than in the last five years combined.

According to Kilmartin, eBay had put the brakes on any real innovation in its product offerings since 2010, but that all changed when Amazon confirmed its Australian launch.

“Competition sharpens everyone’s game, but they knew Amazon would launch well before anyone else did, and they started to roll out improvements quickly,” he says.

The initial ban of eBay sellers using Amazon’s logistics service was a “significant signal” of the marketplace’s intention, says Kilmartin, who believes these moves by eBay are not only to position it strongly against Amazon but to keep the sellers it already has.

“EBay has the advantage, as it’s been in Australia for 19 years, and there are some significant retailers on eBay. They are trying to cater to those businesses, and stop them from jumping ship to Amazon,” he says.

EBay ahead, but perhaps not for long

Sellers on both platforms have told SmartCompany in the past about the advantages of eBay over Amazon, with Trike Bike founder Michael Coates saying his SME prefers eBay not only due to stronger sales, but the platform’s merchant service.

“EBay has a thing called eBay concierge and I’ve asked them to contact me and they’d call you back. With Amazon, you’re on your own,” he said at the time.

Kilmartin pins this as one of the advantages eBay has over Amazon for SMEs, but when it comes to which one is better for sellers overall, he’s unsure. It depends on the state of your business, he says.

“If you’re a new retailer looking to go online and wanting to make life easy, Amazon can do everything around listing and logistics for you. You can run a business from a laptop,” he says.

“EBay has more support for merchants, and if you’ve got warehouses and logistics sorted out, eBay will bring you more customers and more competitive pricing.”

Right now, the little offerings from eBay are likely to have an impact on where customers shop and how SMEs sell, says Kilmartin, but he believes before long, Amazon’s wheels will get rolling and the retail giant will start to become the better choice unless eBay can compete.

“The way it is right now will change. Once Amazon has three or more warehouses in Australia, I think its marketplace for merchants will be more appealing,” he says.

“EBay has more traffic and more sales, but without their own logistics and warehousing, if you order three different items from three different sellers, it will come in three different boxes. For Amazon, they can all be shipped together, which benefits both consumers and businesses.

“EBay is currently a bit like Nokia in 2007, and once Amazon gets rolling and we can compare its full offering, it just might be the iPhone.”

NOW READ: Why shipping is a key factor in converting online shoppers in 2018

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Dominic Powell

Dominic Powell is the lead reporter at StartupSmart.

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