In its second-largest acquisition, Amazon buys the company for $970 million.
EBay has become the first online merchant to break out mobile commerce sales, and with good cause: Sales generated through its iPhone app and m-commerce site have hit $380 million so far this year.
EBay Inc. has made big news in the world of mobile commerce, becoming the first online merchant to break out m-commerce sales, and with good cause: Its mobile app for the iPhone and its m-commerce site, m.eBay.com, have generated $380 million in sales so far this year.
“There’s no question m-commerce has arrived,” says Steve Yankovich, vice president of platform business solutions and mobile at eBay. “We’re changing the way people participate in commerce. If you are a retailer today and you’re not offering the customer the ability to participate in commerce whenever and wherever they want and another retailer does, you’re going to have a problem.”
The $380 million figure for m-commerce sales comes as a surprise to some experts.
“That is triple what I would have expected, and says a lot about the present and future of mobile transactions,” says Jon Paisner, an analyst who specializes in m-commerce at research and consulting firm Yankee Group Research Inc. “This shows mobile is not just about inquiring anymore, it’s also about transacting. EBay has now proven that online commerce can move to the mobile channel, and when done correctly can deliver millions in sales.”
Mobile experts also note that eBay is a good fit for m-commerce.
“EBay is one of the better use cases for mobile commerce,” says Mark Beccue, senior analyst, consumer mobility, at ABI Research, an emerging technologies consulting firm. “EBay customers are adamant and very enthusiastic, and the only way to keep up with auctions anytime, anywhere is mobile. Enabling people to keep up with their auctions in real time through untethered commerce was a very clever move by eBay.”
However, eBay notes that it is not just an auctioneer, and that there`s about a 50/50 split between sales of auctioned items and fixed-priced products.
From January to July, eBay customers could bid through the mobile app and m-commerce site and make a binding commitment to buy a product, completing the purchase later on the e-commerce site. Since July, customers can also complete a purchase in the mobile channel using PayPal, the electronic payment system eBay owns. EBay used technology vendor Critical Path Software to build the site and app.
The eBay mobile app has been downloaded more than 4 million times. Last year, nearly 60% of mobile eBay shoppers used the m-commerce site, also known as a WAP site for Wireless Access Protocol, while about 40% used the mobile app, which launched in July 2008. This year, the numbers reversed, with nearly 60% of mobile shoppers favoring the iPhone app. EBay credits the switch to more publicity and awareness around the app, even though it has yet to do any formal marketing around mobile, and smartphone users’ increasing appetite for apps. Yankovich adds that most of the traffic to its mobile site comes from iPhones.
EBay made mobile a formal and greater part of Yankovich’s responsibilities about six weeks ago. He says the company is ramping up the resources it devotes to its mobile strategy.
“When you have a moment to buy something, where are you and what screen do you have? The whole premise behind mobile commerce is buying during downtimes, such as waiting for a table at a restaurant, between action at your kids’ soccer games, sitting in front of the tube-anywhere, anytime,” Yankovich says. “When a customer thinks about a purchase, she can pull the trigger at that moment.”
In addition, eBay believes it can more easily test new ideas in the mobile channel than it can on eBay.com.
“We can use mobile as the tip of the spear when it comes to trying new ways to engage customers,” Yankovich says. “It might be a new way to browse or search for items. We’re exploring things like voice recognition. We can experiment with far less investment and do so a lot quicker with mobile than with the e-commerce site.”