1.What is competition like in the online auction industry? How does it compare to competition in the more general e-tailing segment? What do we learn about the nature and strength of the competitive pressures eBay faces from doing a five-forces analysis of each segment?eBay has a strong presence with 85% of commerce to commerce, and 64% of total online auction business. The most significant competitors to eBay's auction business are: Amazon Auctions (5-7% market share), Yahoo Auctions (who as of May 26, 2006 has partnered with eBay, thus giving eBay additional strength), and uBid. Bidville and ePier are two smaller competitors that have closely copied eBay's look and fee structure.
It has been forecasted that worldwide e-commerce revenues would be 6.79 trilling in 2004 and that online retail would grow at an annual rate of 19% from 2003-to-2008 to reach $229 billion, 25% ($57.5 billion) of which was expected to come from online auction sales of various country segmentation.
Refer to Appendix A, Figure 1 for more details.
eBay's business segment of business-to-consumer indicated that U.S. e-commerce accounted for over 65% of all Internet transactions in 1999, but was expected to account for only 38% in 2003. The slower growth in the U.S. is likely a result of emerging countries. For example, Asia was expected to grow very rapidly following the 2001 decision to join the WTO. In 2002, Germany, the United Kingdom, France, and Italy accounted for 70% of the e-commerce in Western Europe; but, this share was expected to decline as business-to-business e-commerce in Europe was expected to triple from 2003-to-2006. Refer to Appendix A, Figure 2 for more details.
1. Competitive pressures associated with the market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry...