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Sat July 24 2021 14:02:45

Game of Ecommerce Chess: Who Should Acquire Whom?

By: Ina Steiner

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There's often speculation about which companies tech giants should acquire. An article in Marker took a look at Etsy's acquisitions, sparking the question once again, are ecommerce giants making the best use of their capital? 

As Etsy makes some strategic plays, some other online marketplaces are sitting tight. eBay is actually downsizing its portfolio with the sale of its Classified unit and StubHub ticket marketplace, as well as its Korean business unit.

That contrasts with Etsy's acquisition of DaWanda (actually a referral agreement, not an out-and-out purchase), DePop, Reverb, and recently, Elo7.

Marker (a publication from Medium about the intersection of business, economics, and culture) wrote about Etsy's strategy:

"Etsy patiently waits for deals that meets its M&A criteria. These include: strong and authentic brands, vertical or geographic leadership, expanding Etsy's TAM, asset-light marketplace business models, unique supply, similar growth drivers, and aligned missions. A long runway for growth and the ability to improve operational and financial performance by implementing customer service, payments, product, and marketing learnings from Etsy are two additional defining characteristics."

(TAM stands for Total Addressable Market, which we find are generally pie-in-the-sky estimates with little basis in reality.)

Etsy is diversifying in terms of product categories (Reverb, Depop) and geographically (Elo7).

Are there other marketplaces you think are ripe for the picking? And as eBay gets smaller, does it make itself an acquisition target, and by whom?



Comments (8) | Permalink

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This user has validated their user name. by: Rexford

Sat Jul 24 16:26:34 2021

I think that many of us feel that both Etsy and eBay are a huge waste of time with little return. We are focusing on our web sites. I don't really care who they purchase. The C-suite at both companies only care about enriching themselves.

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This user has validated their user name. by: The End

Sat Jul 24 19:14:46 2021

Ya....
Sounds like Etsy has 'em all fooled.......

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by: Geetar This user has validated their user name.

Sun Jul 25 06:46:22 2021

I don't know. I sell on both Ebay, and the Etsy acquired Reverb. Before acquisition Reverb had their rate at 3.5%. They were quickly scooping up Ebay sellers. Then Ebay lowered their rate to 3.5%.

When Etsy got their hands on Reverb they left the rate at 3.5% for about a year and a half. Then, of course they raised it. Surprisingly, Ebay didn't raise their rate, witch I thought they would.

It's just funny to see how these smaller sites can make money with low commission rates, but larger ones like ebay, etsy, and amazon cant.

Selling on the internet, you are going to pay somebody. Weather it be Ebay, Etsy, Amazon, or even if you have a website, Google. It seems like with the lockdown there are more sellers than ever trying their hand at ecommerce.

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This user has validated their user name. by: toolguy

Sun Jul 25 12:20:03 2021

Paypal should buy eBay!

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by: AddyUp This user has validated their user name.

Sun Jul 25 14:19:26 2021

Is that the PayPal with rising fees, pay for chargeback protection (racket), and the ending of "funds now"?

Sounds like they are already becoming eBay or getting some practice in before the buy out.

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by: pace306 This user has validated their user name.

Sun Jul 25 20:03:25 2021

It doesn’t matter which of the 2 buys each other.

Each one is evil in its own right. Neither can compete with Amazon which is their 1 and only goal, so they resort to theft, threats and intimidation.

The devil you know vs the devil you don’t …..

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by: Mazdaman This user has validated their user name.

Mon Jul 26 00:42:21 2021

We've been on eBay as sellers for almost 22 years now, and the amount that eBay has declined is remarkable.

So I agree they'll be bought, but I have a "hunch" (cue Marty Feldman in "Young Frankenstein") that the elements of such a purchase are already within eBay.

They now have a Wal-Mart ex-exec as CEO, and the more I watch them and suffer under their scattered "leadership", I wouldn't be surprised if Wal-Mart stepped in to "bail eBay out" when Ianone was finished setting the self-destruct charges.

I'm not saying he has a conflict of interest, mind you, but think about what he's done to "right the ship" given eBay's existing problems (lack of support, buggy software as never before, dwindling seller base, et al) and it just seems that before too much longer, an offer will be made to purchase eBay while they're limping along.

I could be wrong, but it's just a feeling, as I don't see anyone else that WOULD WANT EBAY AT ALL, other than to perhaps shut them down completely to eliminate competition, and that would mean fewer entities capable of doing that.

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by: cvsharkey This user has validated their user name.

Mon Jul 26 08:18:25 2021

I don't know eBay's insides well enough to know if there is anything left that would be an attractive buy. I'm sure they will outprice themselves, that is all about negotiation.

But they will sell, if possible, before they let it "die on the vine."

Is there anything left that would be attractive to other online marketplaces?  What about their search engine technology? Is it robust? Up-to-date?



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