The world’s largest retailer will end free shipping for online orders under $50 Canadian starting April 2.
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While focusing first on Russia, eBay also has ambitious plans to grow its business in Brazil, India and China, and in e-commerce markets where it does not have a local presence. Last year eBay launched an English-language site for international consumers that consolidates all its global inventory and shows a visitor only items that will ship to her country. It plans to add what Jones calls local language "skins" to that site in the same way it has for Russia.
Other global projects include a sales arrangement in November with Xiu.com, a retailer that has been selling fashion and luxury goods online in China since 2008. That move heralds eBay's return to China six years after it shuttered its operation there, following the emergence of Taobao.com, a unit of China's Alibaba Group Holdings Ltd., as the country's dominant online marketplace. Armed with ambitious game plans, some of which are already in motion, eBay expects its sales in Brazil, India, Russia and China, and emerging markets to account for as much as 25% of its marketplaces' global active users and 12% of its global sales by 2015. (Active users are those who have listed or bought on eBay in the previous 12 months.)
To put those figures in context, in 2012, consumers in those countries spent $3.2 billion on eBay marketplaces, 4.3% of eBay's global gross merchandise value, that is, the value of goods sold on eBay. EBay forecasts those markets will drive as much as 40% of its new active users over the next three years, helping it double its global active users from 100 million to 200 million by 2015. By comparison, eBay rival Amazon.com Inc. already claims around 200 million active customers who have purchased in the past year.
EBay's global sales growth will never come to fruition if U.S. sellers find accepting orders and shipping goods to foreign countries a hassle. Recognizing that, eBay last year launched its Global Shipping Program, which aims to make an international sale look and feel like a domestic transaction for both the seller and the buyer. The program, in beta testing, is open to U.S. sellers with a standard or higher seller rating. U.S. sellers eligible for the service see a banner within their account management hub inviting them to opt in. Consumers in the 26 countries where the program is live see on eBay only the items available for delivery in their country. When an international shopper clicks to buy, she's asked to enter her postal code and the service then calculates the final price, including shipping fees and import charges. Shoppers must pay using PayPal.
The seller pays the same fee to eBay he would for a domestic purchase and ships the package to shipping vendor Pitney Bowes Inc.'s warehouse in Kentucky. Pitney Bowes prepares the item for customs, and then ships it. Most shoppers receive their purchase within a week after it arrives at Pitney Bowes' warehouse, eBay says.
Joel Cohen, owner of AutoPartsDirectToYou, which sells automobile parts on eBay, Amazon.com and via its own e-commerce site, says the service has cured many of the headaches he had when selling internationally on his own.
"When we would ship a package to Europe, we would have no idea what the taxes and duties would be, and many times when customers saw the fees they would refuse the package," Cohen says. When that happened, the item would be sent back to Cohen along with a hefty bill. "For an $80 part we might have to pay a $40 shipping charge plus brokerage, duties and other fees," Cohen says. "One of those cases could wipe out 15 to 20 good orders."
Since opting into the eBay Global Shipping Program at the end of 2012, Cohen has increased his international eBay sales by about 15%. But there have been bumps. For example, at first when international shoppers would track a package and see it was en route to Pitney Bowes' warehouse in Kentucky some contacted customer service thinking the order was being shipped to the wrong place. Customs also refused some items. Many countries prohibit the import of liquids, so some orders containing oil or gas got sent back. Cohen says information about those restrictions was often in eBay's fine print.
Jones says by and large sellers are happy with the sales the program brings without a lot of effort. "One seller said, ÔAll I have to do is check a little box and then magical gnomes do all the rest of the work,'" Jones says.
It's not gnomes, however, that are getting those orders to foreign shoppers—it's a product of years of planning and investment by eBay to drive international sales. Jones hopes all the work will result in continued global growth for eBay and its sellers.
If all goes according to plan, before long she may never have to answer the "Why Russia?" question again.