|Mon June 16 2014 16:32:44|
Should eBay Launch Premium B2C Marketplace for Branded Goods?
By: Ina Steiner
Some online sellers have long believed that eBay should separate its marketplace in order to have different policies for different types of items. One proposal years ago involved eBay making separate sites for auctions versus fixed-price listings. Another proposal involved separate sites for new, commodity goods versus used goods and collectibles. eBay may be headed in this direction, as we noted in January, following a path Alibaba has successfully pursued.
The reason some advocated a spinoff marketplace was due to eBay's "one size fits all" approach to policies, features and marketing. For example, clothing sellers feel they should be allowed a shorter return policy than other types of items due to the high rate of returns abuse by apparel shoppers. Another example: unique antiques and collectibles require different approaches to customer service than easily substituted commodity items.
Smaller sellers of used and unique items have said they hoped a separate marketplace for new commodity items would allow them to operate with more realistic, suitable restrictions.
eBay actually tried creating a marketplace for new commodity items called eBay Express in 2006, but some believe the company didn't give the site enough time and resources to fully determine its viability before shutting it down. So up to this point, all entities, whether global brands or casual sellers, list on the same eBay marketplace.
In China, Alibaba took a different approach. It launched a consumer-to-consumer marketplace called Taobao in reaction to eBay entering the China market. But in 2008 it launched a business-to-consumer marketplace called Taobao Mall (now called Tmall) that let major retailers and internationally known brands sell directly to Chinese consumers.
The Wall Street Journal pointed out today that the B2C Tmall marketplace is growing faster than the C2C Taobao marketplace. Here's what Alibaba said about it in its SEC filing:
"The overall increase in total GMV transacted on these marketplaces (Taobao Marketplace, Tmall and its group-buying site Juhuasuan) was primarily driven by increases in the number of buyers and the level of their spending. The rapid increase in GMV transacted on Tmall in particular was attributable to the increasing number of buyers making purchases on Tmall, reflecting consumer preferences for branded products and a premium shopping experience, increases in the level of spending of buyers and the beneficial impact of promotional events."
The desire for shoppers to purchase branded products directly from major brands themselves may be why eBay launched an initiative called Designer Collective last week, a direct-to-consumer platform in the clothing category.
However, since Designer Collective listings are also integrated in eBay search results, it's possible eBay could actually push listings from low-volume sellers lower in search results.
Should eBay split up its marketplace, and how should eBay handle B2C sellers? And, as one reader pointed out, what's in it for the brands?