EBay generated $400M in business from iPhone app: CEO
Mr. Donahoe said that the iPhone and BlackBerry devices are already changing consumers’ shopping habits and recommended that retailers change and evolve if they want to compete. He spoke at the Shop.org annual summit in Las Vegas.
“Mobile devices will play a role and the notion of mobility will have a huge impact on ecommerce,” Mr. Donahoe said.
In two years, about 40 percent of Internet access will happen from a mobile device. IPhones are only about 8 percent of the market, but they make up about 40 percent of Internet usage at present.
Since $400 million was generated in business since the eBay application’s launch, Mr. Donahoe said that devices like this one and others like it are going to impact his company.
Last week someone bought a $350,000 Lamborghini on the iPhone. Also, someone bought a $150,000 boat from their iPhone.
Consumers are bidding via mobile, browsing products and eBay’s mobile sales volume is growing in the double digits every month.
“I know this will be an important device for ecommerce,” Mr. Donahoe said.
One of Mr. Donahoe’s colleagues came into his office and laid a book on his desk. To cover the title of the book, his colleague placed a pack of M&Ms on it. He snapped a picture with his iPhone and was able to locate various book stores that sell it and their prices for it.
Mr. Donahoe believes that innovation is driven by the small application developers and that they will impact how people will shop.
EBay is launching its first developer conference and will open its PayPal and eBay platforms for developers.
Mr. Donahoe talked about PayPal and said the payments side of ecommerce is what stifles the business.
“People are just not comfortable providing their credit card information over the Internet,” Mr. Donahoe said.
Mobile payments are the future.
EBay is right at the center of the technology and commerce worlds. 300-400 million people use eBay products worldwide.
The reason for eBay’s success?
“You have to adapt to compete and that is what we have done,” Mr. Donahoe said. “We adapted to the fact that consumers are embracing new technologies and we took advantage of that.”
Ecommerce is maturing as a market, but it is only about 5 percent of overall retail sales.
Mr. Donahoe forecasts it will eventually end up at 20-30 percent.
Traditionally in retail people talk about the online and offline, but the lines are blurring.
People are researching online, go in-store to buy and then once they are at a retail location, they use their mobile phones to comparison shop.
“There won’t be just one winner in ecommerce,” Mr. Donahoe said. “There will be many winners. When there is a lot of innovation, there are multiple winners.
“Online payments are a bit different, as it is a major friction point for online retail,” he said. “The online payments world will soon mirror the offline.
“It is all about convenience and speed and mobile payments and micro payments will help bring that 5 percent to 10 percent.”
After Mr. Donahoe’s keynote, Patti Freeman Evans, vice president and research director at Forrester Research interviewed the eBay executive.
She asked who he considers as his competition and he said instead of worrying about competition, eBay focuses on the customer.
Most likely this type of an approach is what got eBay 90 million unique visitors per month. A whopping 75 percent of that traffic is organic. The marketplace also buys about 20 million keywords from Google.
EBay is all about giving its merchants – big and small – access to traffic so that they can sell their merchandise.
“When we though about competition we did not want to focus on any competitor,” Mr. Donahoe said. “Instead we ruthlessly focus on customers. We need to think about how to win and get our sellers to win.”