Today both eBay and Amazon have about 75 Million unique visitors per month and they are ranked the 6th and 8th most popular web sites in the world today.
Very early on, while we were looking at the impact of the internet on Newspapers, we discovered that eBay had replaced the newspapers as the market’s new “dealspace”. And later, while we were looking at ways to monetize the social networks, we discovered that eCommerce sites have some of the highest ARPU’s on the web and that Amazon an estimated ARPU of $21.80 and eBay $7.20.
We also discovered that the retail B2C eCommerce market is roughly 7.5 time larger than the online advertising market but the overall impact of online shopping on the retail sector over the past 15 years has been negligible. However there have been some notable inroads into some market sectors (e.g. Amazon already has an 8 percent share of the U.S. media retail category).
The history and the dot.com success stories that are Amazon and eBay are well known so while we are looking at the world’s leading eCommerce sites I thought I would also throw China’s leading eCommerce portal into the mix to make the analysis a little more interesting.
It is estimated that B2C eCommerce accounts for about 2% of retail spending in China today.
The Alibaba Group operates China’s leading SME B2B e-commerce portal. It also owns China’s leading B2C Portal (Taobao) and Transaction Payments Platform (Alipay).
The SEM B2B platform (Alibab.com) had almost 48 million registered worldwide users and over 600,000 paying members by the end of 2009 delivering annual revenues of US$567.3 Million.
The B2C platform (Taobao) is the eBay of China. It is a one-stop platform for shopping, socializing and information sharing. The transaction volume on Taobao in 2009 was around $29 billion.
The PayPal equivalent within the AliBaba group is Alipay. It handles more than $146.5 million in daily transactions online from more than 180 million daily users.
In comparison there are an estimated 75 million active world wide users on PayPal.
AliBaba also partners with leading Banks to offer a credit facility to its members. The Ali-Loan scheme current has US$ 878.5 million in loans across its portfolio.
They also operate Alisoft.com and a PaaS cloud offering that delivers sales and contact management software, and communications applications to China’s SMEs. Finally they own Alimama, an online advertising exchange company, and are a partner in one of China’s leading Internet portals – China Yahoo!.
The estimated ARPU/M across Alibaba’s 47.7 Million visitors is $11.885 so this compares very favourably with eBay’s $7.20 ARPU/M.
Now let’s take a look at the MobCon strategies on the MobCon Radar.
We’ll begin with the biggest player in Amazon.com.
What's on Amazon's Radar?
Now let’s take a look at eBay.com
What's on eBay's Radar?
Finally, here is AliBaba.com
What's on AliBaba's Radar?
What I find interesting is firstly the acquisition strategies that have been employed. eBay has been the most aggressive while AliBaba appears to have focused on developing its own in-house technology.
eBay has also focused its strategy on building it’s core business of electronic trading and exchanges while supporting this core with the adjoining payments and advertising platforms. On the radar Skype, the SM Apps and the DIY media platforms look like orphan children.
In comparison Amazon has chosen to utilise media to support the sales cycle in its core media retail trading platform while exploring IT platforms to create the next generation media retailing and delivery platform (e.g. Kindle and Cloud Computing).
AliBaba appears to have successfully spread itself across that half of the MobCon radar embracing the best of both of Amazon and eBay’s strategies simultaneously.
All three have proprietary payment platforms with most analysts suggesting that Alipay will overtake PayPal as the world’s most successful online payments platform within the next 3 years.
Of course the big question moving forward for all three will be in a mobile world who has the time for eCommerce? And what the radars don’t express is each exchange’s commitment to Mobile.
At the moment AliBaba is the only one without an iPhone or Mobile Phone app choosing instead to deliver access to the AliBaba site via the mobile web browser.
As I have said before mCommerce has the potential to far more important to the future of retailing than eCommerce. Unlike eCommerce, which was always more about doing more with less than creating new retail opportunities, mCommerce has the potential to change the way people browse and buy in the real world.
When customers start packing the new plastic and using their mobile phone pay for goods they have scanned or discovered on their mobile phone then the game will change again for all the eCommerce players.
Amazon has moved early (perhaps too early?) to own the mobile media exchange platform of the future by launching the Kindle. The problem is they have failed to learn the lessons of the iPhone and have delivered a solution more in tune with the mobile reality of old “publishing media to people on the move” Telco model than the rapidly emerging “Mobile Lifestyle” model.
The emerging platforms (e.g. iPad) that are changing the shape of the MobCon are not simply proprietary platforms that are locked into proprietary app stores but “Dreamscapes”: Platforms that provide the illusion of being all things to all people. Mobile Media Containers that allow both developers and customers to infinitely customise the content on the platform.
That’s why both the iPad and the iPhone can be a Gaming Platform to Tapulous, a Newspaper Publishing Platform to the New York Times, an auction platform for eBay, a video distribution platform for Netflix and a POS terminal to Square. They are truly revolutionary “Mobile Life” devices that can be all things to all people.
That’s why it is worth comparing what’s on Apple’s radar to the leading exchanges.
What's on Apple's Radar?
Most players in the MobCon landscape have either remained focus on their core business (e.g. the newspapers) or they have adopted a “shot gun” approach to their MobCon strategy (e.g. Microsoft) but as we can see – unlike any other player in the MobCon landscape – Apple’s strategy has evolved over the past decade into a “pincer” movement that brings the Electronic Commerce Trading Platform together with Mobile Hardware to create the MobCon platform of the future.
This is what makes the next 10 years interesting. Who has the more agile, scaleable and profitable mCommerce strategy? Apple or the established online eCommerce players?
Further Reading:
Here are two slide shows that I have discovered that provide some background insight into the state of play for eCommerce/mCommerce in China. The first one provides some background on the battle between Taobao and eBay for market share during the mid-2000′s.
Posted on April 5, 2010
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