EBay Inc. is exporting a method to boost cross-border sales it pioneered in Russia to 120 territories, as the online marketplace seeks to recaptur
EBay Inc. is exporting a method to boost cross-border sales it pioneered in Russia to 120 territories, as the online marketplace seeks to recapture growth in the face of competition from Amazon and Alibaba.
In many places, EBay still means domestic classifieds; Americans mostly sell to Americans, Britons mostly to U.K. customers. But a few years ago, EBay’s local head realized that Russians mainly use the site for cross-border commerce. So, Ilya Kretov tweaked the software to let sellers easily target foreigners, resulting in a 50 percent surge in exports by Russians last year. Now, EBay has handed him 120 countries to replicate the achievement.
“In most emerging markets, where we don’t have localized websites, the penetration of global e-commerce players is insignificant compared with the internet audience — it’s a good source for growth,” Kretov said in an interview in Moscow.
Expansion is crucial for EBay, which has lagged behind industry leader Amazon.com Inc. and Alibaba Group Holding Ltd. by growth in recent years. The San Jose, California-based company wants cross-border e-commerce to take off in developing countries like it has in China, whose consumers lead the world in ordering goods directly from merchants abroad.
While Russian consumers typically buy electronics gadgets — such as smart watches and accessories for GoPro cameras — merchants in the country sell things like fishing lures and collectible $30 tin soldiers to buyers in the U.S. and Western Europe, according to EBay.
Kretov’s sphere of responsibility now includes Africa, the Middle East and most of Europe, excluding large developed markets such as the U.K., Germany, France and Italy, where EBay is already a popular domestic marketplace.
Kretov’s team has started activities to boost sales in several dozen countries. This includes rolling out software dubbed EbayMag, which lets listings be shown in other languages, so merchants can tag countries where they want goods to be displayed. EBay can expand cheaply to new markets because, unlike Amazon, it doesn’t need to build warehouses and shipping centers, Kretov said.
More Insight
“Emerging markets are an important growth opportunity for EBay,” said Colin Sebastian, analyst at Robert W. Baird & Co. “If they can build and leverage a buyer base in these countries, then I would expect there will also be a ready market of sellers.”
EBay has an initiative underway to glean more insights regarding supply and demand, based on sales and searches on its marketplace. It could use that technology to determine which products are in demand overseas and match international buyers with merchants, Sebastian said.
The classifieds giant gets the lion’s share of its sales from international markets, such as the U.K., Germany, Australia and Korea, and cross-border business from China, but the U.S. still accounts for about 43 percent of revenue.
In Russia, EBay has about 3 million monthly users, according to researcher Mediascope. That’s not much compared with an internet audience of about 80 million. Failing to become a popular domestic marketplace, EBay has focused on cross-border sales as a niche player, said Fedor Virin, co-founder of researcher Data Insight. It barely has a footprint in many of the markets now targeted by Kretov’s team, Virin said.
Still, Kretov said EBay has strengths to leverage as it seeks to reprise Russian growth in other markets.
“We are basically the only marketplace that enables merchants from emerging markets to sell globally, giving them access to the most interesting markets in terms of demand, such as the U.S. and Western Europe,” Kretov said.
bloomberg.com
