EBay Makes a Comeback


Today’s world is primarily driven by the internet, including e-commerce. This does not come to the surprise of EBay CEO, John Donahoe. Technology has driven scale and automation and our shopping experiences have become less dependent on human interaction and more dependent on a steady WiFi connection. Donahoe says, “these changes in the commercial landscape tend to be ‘phrased in zero-sum terms: big retailers versus the little guy. Local versus global. ‘”

While EBay is a major contributor in this landscape, its biggest competition is Amazon. Amazon is known for driving retailers out of business, especially with its most recent proposition to deliver packages with drones. One thing that stands out about Amazon is the idea of “showrooming.” Amazon’s mobile application will allow you to scan a barcode of any item in a store and it will show comparable items with competitive pricing. You can essentially buy the item in a few clicks while still in the store.

EBay is initially thought of as an auction website. However, “since Donahoe took over in 2008, he has slowly moved the company beyond auctions, developing technology partnerships with big retailers like Home Depot, Macy’s, Toys ‘‘R’’ Us and Target and expanding eBay’s online marketplace to include reliable, returnable goods at fixed prices.” This is EBay’s process strategy that will revolutionize the e-commerce world, and to Donahoe’s hope, take on Amazon.

In our Management of Operations course, we have talked about the idea of a “process strategy.” The objective is to create a process to produce products that meets customer requirements within cost and other managerial constraints. EBay is taking on a “mass customization” approach to its process strategy. It is the rapid, low-cost production of goods and service to satisfy increasingly unique customer desires. EBay is creating a “process redesign.” It is the fundamental thinking of business processes to bring about dramatic improvements in performance. We learned that changing processes like this can be difficult and expensive. EBay did not acquire all of its retailers for cheap, they had to put in an investment in order to create profitability which is what is needed in a process redesign.

EBay wants to push the concept of a “digital wallet.” While other digital payment options exist, like Google Wallet and Apple Pay, EBay wants to expand it. In 2002, EBay bought PayPal as a way to safely transfer money between people who don’t know each other. EBay has also been experimenting with a concept it calls Connected Glass, an interactive glass that may one day create a “smart” mirror in a store that can take measurements and allow you to try on outfits virtually.

While Donahoe doesn’t know exactly where all of his technological efforts will lead him and EBay, he says, ‘‘I would say everything we’re doing is just enabling the future.’’

Do you think the PayPal Digital Wallet is going to take off? Or will it be forced to the side by Apple Pay and other digital wallets?

Read the article here

14 thoughts on “EBay Makes a Comeback

  1. Interesting read, I agree that today’s world is primarily driven by the internet. I started using Apple Pay last week and love it already. I get excited to use it at stores that allow you to pay with that form. I think that PayPal Digital Wallet will take off because even though I have Apple Pay, I would be more willing to use PayPal Digital Wallet. I like the security that PayPal’s services offers and am still on the fence how secure Apple Pay is. PayPal is a brand I trust and have been familiar with for years.

  2. Very interesting post. Digital wallet has been a big topic where it would eliminate credit cards. This would definitely make it more convenient for consumers to purchase goods and services. However, I do not think that eBay will be as successful as other digital wallets. I think it’s too late in the game since big companies have already taken off. Unless they think of something innovative to be more convenient, they will be crushed by their competitors.

  3. hi, farzana. good post and it is actually an issue that we should concern about. In my opinion, people use their Paypal to pay instead of their credit card because it is safer and protectabel . Once the buyer do not receive the item or wanna return the item, they can open an issue to request for refund. The most important is that the information of buyer will not be stole. In addition, if Ebay use other wallet, it may mass up their system. If this is an convinent and safe way, why we need to take off it?? On the contrary, we should use it effective.

  4. This was a very interesting post. Ebay has a lot of competition with the Apple pay but i think the PayPal Digital Wallet is going to take off. A lot of people use Paypal now they like its features, it is a fast and safe way to make online payments. The PayPal digital will be an improvement on that and that will benefit Ebay.

  5. Nice post! I believe that there will be many digital wallets that will try to establish a strong presence but eventually only will survive. The fact that Apple already is a top company makes me believe it will be the strongest player in the e-wallet business. Regardless of which company takes off, I believe it is a technology and business that will definitely take over and become the primary method of payment for most people.

  6. Interesting post. I feel like PayPal Digital Wallet will be successful for Ebday for the time being because people have not started using Apple Pay yet. With that being said, there will be competition for Ebay, and they will lack competitive advantage over Apple.

  7. Great post. Anytime I buy something online, like most consumers, I use PayPal. I think PayPal Digital Wallet will be very successful because of how popular the service is already. So many people already have accounts and trust the company very much. I think many consumers will see this as being very convenient and it will become popular in a matter of time. Apple pay will probably be successful too, but after a recent Apple hacking I think consumers will trust PayPal much more.

  8. Apple just came out and they are still not available everywhere. For that reason I believe that PayPal digital wallet has a chance to still be a leading digital wallet service. I’m very excited in the direction the digital wallets are heading. I can’t wait to pay for stuff just by tapping a car on a card reader. The more digital wallets available the better they’ll try to outdo themselves and the more the consumer will gain.

  9. I think that using a product like the wallet will be a good thing. The more companies that are working on creating one the better the final winning product, lets face it probably Apple’s, will be. As long as Ebay can get out a strong product in a timely manner I think it will adopted by consumers.

  10. I have used eBay for years and have always been pleased with their company. I’ve seen Paypal expand so much, it’s incredible. I believe eBay has the power and knowledge to make its digital wallet a great competitor. Its experience with Paypal is enough backing for me to say that it should definitely pursuit the idea.

  11. Very interesting post, I really think that PayPal Digital Wallet is going to take off, PayPal is a very well secured way for paying especially when you don’t really know who you’re dealing with. In addition to that, most People are more familiar with PayPal than any other digital wallets. I purchase a lot of items from EBay and I feel very comfortable when paying through PayPal. In addition, a large number of people when looking to buy anything online attempt to check if the site offers the option to pay by PayPal , if the site doesn’t offer that they won’t go through with the order.

  12. This is a very interesting post for me as a user of Paypal. I personally think that paypal wallet will take off because of paypal’s reputation over the users, for providing a safe way for people to make transfers. Also their security is top notch and peoples information is not stolen which gives them a better reason to use paypal wallet and trust it.

  13. Interesting. I think that there is room in the market for more than one digital wallet. I believe that those who use everything Apple will likely stick with Applepay but that there are also plenty of folks out there who will want different options. PayPal likely has a built in consumer through its eBay affiliation but there still seems to be an untapped consumer out there – one who isn’t Apple and one who isn’t PayPal – maybe a bank, like Chase quickpay could fill that need.

  14. Very thought provoking post. I agree that there is room for more than one digital wallet. It’s nice to have options. Although, what about reliability and security? Since proven players already exist in the market, can a new option climb the mountain to compete with the established providers? Time will tell.

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