Is eBay a good competitor for Amazon?

Interview with Ebay boss : "That doesn't mean that Amazon is evil, no: they do a great job"

The corona crisis has spurred online retail. How much does that affect Ebay?
In fact, we have gained a lot of customers and the existing customers are buying significantly more. At first we were concerned that many would come once, for example to buy masks, and then leave again. But that's not the case, both effects seem to be sustainable. But we also take various measures to keep the new or reactivated customers on Ebay.

Which are they?
With new customers, it is important to get them to make their next purchase as quickly as possible; we offer various incentives and discounts for this purpose. In addition, the number of customers who only buy something but have not yet used Ebay to sell something has increased. With a special program we are currently trying to persuade more than five million customers to sell, for example by offering them vouchers.

And what advice would you give to stationary retailers who are now increasingly relying on online sales?
The greatest challenge is digitizing the inventory. This is often not talked about. For example, it is not enough to simply photograph all the articles and put them online. You also have to think about what the customer wants to know and see. This is less of a technical hurdle than a question of attitude. Those who do well online think from the customer's point of view.

They support the retail sector with the Local Heroes and Ebay Cities programs. How's that working?
We introduced Local Heroes a year ago. Because in every city there are companies that are only active there. For example, Engelhorn is the top dog for sport and fashion in Mannheim. We help them to get a reach that they don't have locally. As an extra service, we also advise how pictures should look or what can be improved with logistics and payment methods. In the corona crisis, we expanded the program again. The dealers receive an Ebay Premium Shop free of charge for six months and benefit from our concierge customer service. In addition, they do not pay any sales commission for three months. As a result, we have already won over 5000 new dealers. The Ebay Cities initiative has taken a back seat, but we will revive it and start a new, heavily expanded one.

What are you doing there?
It all started with an inquiry from Mönchengladbach, and now two or three other cities are included. The idea is to give the cities and local dealers their own website and thus more visibility. With Ebay Cities 2.0, every district town that wants to be able to set up its own platform, also under its own domain. We provide all the technology, so the mayor, city manager or the business development department don't have to worry about it. This means that the dealers are immediately connected to our entire system and we may be able to win dealers who would otherwise not come to us. The name may change, but it will be available early next quarter.

There are also changes in payment processing, how is it?
We have a wide variety of items and dealers. The downside is that understanding how to pay and when it can be a bit tricky at times. We want to make this easier for the end customer and ensure that they are always offered the same payment options. That is the core of our new payment processing.

What is the schedule and status of implementation? When does it become mandatory for dealers?
Since the start of payment processing, we have already processed payments for 340,000 merchants, in the second quarter alone that represented 20 percent of the payment volume. We are therefore well on the way to integrating the majority of retailers worldwide into payment processing as early as 2021 and completing the implementation process for payment processing in 2022.

They also want to improve the delivery processes.
Exactly, because many small dealers do not have their own logistics. We offer them to handle the entire logistics through us. Then the customer does not have to wait five days because the person who otherwise packs the deliveries is sick, for example.
Is that enough to catch up with Amazon?
We are lagging behind when it comes to same-day delivery, i.e. deliveries on the same day, and we won't be offering that anytime soon. Otherwise, Amazon only supports smaller retailers if they sell exclusively on Amazon. That is not our approach, because our fulfillment service is also open to other platforms. So we would also send deliveries for the retailer to customers who ordered through Amazon.

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The platform economy is now also a political issue. What kind of regulations do we need to make the market fairer?
We don't line up and say we're the dear ones. But it is clear that we do not have our own stock of articles, so we do not compete directly with our dealers. We never have to make decisions about whether to cut our own business or that of dealers who sell on our marketplace. But above all it is about questions of market power, due to ever larger ecosystems that are being built. With more and more offers such as streaming, there are lock-in effects in a system where the customer can only decide whether to be completely inside or completely outside. That doesn't mean that Amazon is evil, no: Amazon does a great job. But ultimately I see a risk of monopoly in this. One has to ask whether companies are becoming so powerful and large that they become dangerous and weaken more and more related industries. If you are not already?

So you don't want to become so big and powerful with Ebay-Plus, your competition to Amazon Prime?
No. Firstly because we can't do it at all and secondly because I don't want to copy something that other people do great. My strategy is always to see where my strengths lie. We're the only big platform to buy and sell on. Of course, this is also extremely exciting from a sustainability point of view. We are the only big platform where you can buy everything from all over the world, in every condition. I want to emphasize these facets further and not try to be a second Amazon.

Should Ebay Plus continue to exist and how many use it?
Unfortunately we cannot name or name numbers, but we would like to win even more customers for Ebay Plus. In this respect, we will continue to develop the program and make it more Ebay-specific. I think Ebay Plus was too similar to other programs. Rather, we want to strengthen the issue of “buying and selling” and reward customers who participate in this cycle.

Does that mean the focus is back on trading used items? Recently it was often emphasized that 80 percent are now new products.
Our current campaigns say “New, used and super rare” and “Buy and sell on Ebay”. And these are our topics. If you as an end customer are looking for products, you are usually also interested in precisely this selection. Sometimes I just want something new. And sometimes an older or remanufactured device is just the thing. Or I want to buy from a professional dealer because of guarantees and sometimes an offer from a private seller is okay. If I can find all of this on one platform, like ours, that's an extreme advantage. That's why I don't want to make a 100 percent shift to used goods, but rather play this breadth.

Still, you often don't know what Ebay stands for. How are you going to change that?
Ebay has some catching up to do. We need a clear profile and there is still a lot of educational work to be done to communicate this. And that's what we're going to do now within our campaigns.

For second hand and local, Ebay classifieds is strong, how much does it hurt to sell?
Germany is the only country in which our classifieds business and our core marketplace business have the same name. It was a clever move and it made this business this big in the first place. In almost every other country it has different names and not of the same order of magnitude. Otherwise it's a completely separate business. So there are no separation pains for us, in terms of technology or customer bases. We are also the largest shareholder in the new company.

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Your own offer for young customers, like Catch, doesn't really fit in there, does it?
We started Catch when Wish also entered the German market. It was about cheap goods for young customers. But we found out afterwards that we don't need that at all. Because young customers who are looking for such goods will also find them with us. Therefore, it no longer makes sense to spend marketing budget to build a secondary platform. We have therefore passed Catch on to another operator.

The next two months should be the business of life for e-commerce: Christmas plus corona effects. How do you prepare for it?
There is one big advantage to an open marketplace like the one we have: we don't have one supply chain, we have hundreds of thousands. Our warehouses are everywhere. You saw that with the first corona wave. Initially, most online retailers had problems adjusting their warehouses to meet the new demand. That wasn't a challenge for us because we have the crowd logistics system. And even if there is a shortage somewhere, there might not be a thousand sellers behind the product for an offer, but only 500. But the goods remain available. And even if that should break away, there is a global marketplace where you can look at dealers abroad.

Is that used a lot?
Yes. For example, many more swimming pools have been sold this year. And if there are too few attractive offers from German dealers to meet the demand, our system plays off a lot from Italy or Spain, where many professional swimming pool dealers are based. That is the advantage of our international and open platform, it manages itself.

Oliver Klinck (52) has been with Ebay Germany since 2018 and rose to boss in September. Before that, he had worked in various positions at the Otto Group for 15 years.

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