Mobile fuels eBay growth

20 July 2012

NEW YORK: Mobile commerce is driving growth at eBay, which expects transactions generated via this channel to double in 2012.

The company estimates that eBay, its retail and marketplace platform, and PayPal, the electronic payments system, should each handle a volume of transactions worth over $10bn this year.

As such, the former service is due to double the returns secured through this route in 2011, while PayPal experienced a 150% expansion during the same period.

"Mobile is revolutionising how people shop and pay, becoming the digital nexus of consumers' lives. They want what they want, when they want it, anywhere, any time," John Donahue, eBay's CEO, said on a conference call with analysts.

"The UK and Australia are furthest along because they have the highest smartphone penetration, followed by [the] US, followed by Germany. But the slopes ... are all very consistent."

In evidence of this, Donahoe revealed that 90m mobile apps for eBay's site have been downloaded to date, with 600,000 buyers completing their first such acquisition in the last quarter.

More specifically, a customer buys a handbag in this way every 30 seconds. In terms of big ticket items, 8,000 cars are now purchased per week through wireless handsets, as are 340,000 car parts.

"More and more users, in this case, our target motorist buyer, which is a male, 30 to 50 years old, are actually using their mobile device while they're under the hood," said Donahoe, often making orders "right there on the spot".

Alongside predicting $10bn of eBay transactions will be handled on mobile in 2012, the company's research suggested an equal amount of online sales could be influenced in the same way.

"Our analysis indicates that [for] at least that much of volume that closes on the web, the consumer accesses their mobile device at some point in the shopping experience," said Donahoe.

Turning to PayPal, Office Depot recently signed up to use its mobile payment services. Starbucks, the coffee house network, added similar tools to its Android app, and four high-street chains in the UK have begun using its in-app purchase system.

"What we know in both business units is mobile shoppers and mobile payers are three-to-four times more valuable than web-only, simply because they're more engaged with our products and they're buying more," Donahoe said.

Data sourced from Seeking Alpha; additional content by Warc staff