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What eBay and PayPal CEOs Are Selling in a Post-Breakup World

eBay and PayPal CEOs were positive about their respective companies’ outlook at the World Economic Forum meeting in Davos this week, where they were surrounded by fear and pessimism due to economic conditions and concern over oil prices.

It’s always interesting to see what eBay and PayPal management teams are pitching to Wall Street analysts and the financial press, especially now that the breakup of the two companies is behind them, and with fourth-quarter earnings for both companies a week away.

In an interview with Bloomberg, PayPal CEO Dan Schulman talked about the positive tailwinds around the movement of cash to digital – “you have all the power of a bank branch in the palm of your hand right now,” he said of consumers with mobile devices.

Schulman said merchants aren’t so much concerned about digital payments, but about using mobile and software to get closer to their customers. He referenced the value proposition PayPal could help bring merchants at checkout, such as giving customers the ability to order ahead and skip the line.

Asked by Bloomberg reporters about the competition, the PayPal CEO said its real competition is cash. “85 percent of the world’s transactions are done in cash.” He said the four key metrics that PayPal use to measure its own and competitors’ business are the following:

  • number of active subscribers;
  • number of transactions per subscriber;
  • revenue growth;
  • free cash flow.

But PayPal also looks at customer needs, and, “do we have a value proposition that’s pushing those boundaries.” He was also asked about Venmo and how PayPal planned to monetize the service – the full video interview is available on the Bloomberg website.

eBay CEO Devin Wenig meanwhile hadn’t made it on to television as of this writing, but he published a blog post with his thoughts in “Davos 2016: Five Ways Technology Will Disrupt Commerce.”

The five trends Wenig identified as impacting ecommerce over the next five years included: the age of everywhere, truly global trade, virtual reality as a retail tool, on-demand inventory and supply, and sustainable shopping.

In explaining what he meant by on-demand inventory and supply, Wenig said, “The manufacturing model of today is the one that has existed for many years: manufacturers make one million of a particular product and then try to sell them. But as these centres become technologically aware, data-driven and capable of quick turnaround, the need to create inventory stores for products, and then find customers for them, is being eliminated.

“So imagine a world where you want a red cashmere sweater that is a certain fit, style and length. This is then immediately turned around in a manufacturing location somewhere in the world and at your doorstep in five days. That reality is closer than many believe.

“This puts demand first and provision second, the implications of which are dramatic. If everything a consumer wants can be defined, sourced, generated and delivered in a few clicks, the supply chain as we know it will be turned on its head.”

Wenig said companies that embrace the five trends he outlined were looking at a $14 trillion opportunity. His full post can be found on the eBay blog.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.