Ebay Case Presentation

7/27/2019 Ebay Case Presentation

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How should eBay position itself in the Indian ecommerce market for sustainable growth?

Customer experience and innovat ion would be the differentiating factor in the long run

• Indian consumers are now confident enough to make online purchases of

up to Rs 25,000, from Rs 2,000- 5,000 in the recent past (Source: First Data Corporation)

• Under-10 million internet users buy online in India; about 150 millioninternet users or around 75 million households are 'ready' for e-commerce. (Source: ICICI Merchant Services)

• As per a survey, Indians showed willingness to spend 33% of their disposable income online which is among the highest in the world. ( -Rajdeep Endow, Sapient Nitro)

• “More personalised offers, loyalty

programmes and better customer care iswhat most e-commerce companies would focuson to offer customers a richer, more relevantonline experience," an industry analyst said.

• Cash-on-delivery has been one of the keygrowth drivers and is touted to have accountedfor 50% to 80% of online retail sales. (Source:E&Y)

11

38

No. of users making online transactions(in million)

2011 2015

6.3

14

38

E-commerce segment size (in million $)

2011 2012 2015

For the above positioning, eBay has to focus on following dimensions:

Integrated Marketing Communication• This is important to increase the awareness and

invite consumers to visit the site• TVCs, including alternate channels like

newspapers, magazines, social media sites, e-mails, hoardings must promote eBay for safety,assortment and superior customer experience

SafetySecurity of transactionsand COD on widevariety products must bepromoted

Customer SupportCustomer care with zerowaiting time and 100percent satisfaction

All-in-OneConsumer should haveall the online solutionsincluding retail, mobilerecharges, hotel, travelbooking

Holistic Customer Experience

Safety & ReliabilityConstant

Innovation

Ebay.inPositioning

Positioning Positioning Positioning Positioning Positioning Positioning



Worldwide, 2.7

billion people areonline and in Indiaalone internetpopulation is 74million,experiencing veryhigh growth

Worldwide online

retail marketpenetration is74.4% and in Indiait amounts to 60%with signs of strong futuregrowth

97% of people

having internetaccess researchproduct andservices onlinebefore buying

In 2012, world B2C

E-commerce salesgrew by 21.1% toapprox. $1 trillionand is expected togrow further at18%business isworth

In India, with 0.6

billion, E-tailingamount for 6%of e-commerce and isset to growhundred fold totouch $76 billionby 2021

Online retai l ing presents huge g rowth p otential for B2C comp anies with increasing internet penetrat ion and enhanced adoption of

E-commerce by youth

Why NIKE should go online ?

NIKE – ONLINE Advantages

Cut Costs

• Internet orders cost less than $1 /order which is much less in comparison with

channels e.g. phone/fax/mail orderscosting ~ $4 and normal brick/mortar • Low Inventory Costs as the goods are

directly delivered to customers insteadof being passed through several,middle men.

• Low Operating Costs with reducedoverhead as in this platform there is noneed to pay rent for a storefront, hire

employees, or even print advertising.

Increase revenue• With direct selling to customers and

cut down of middle man, thecompany can enjoy better profitmargin

• Online store remain open 24

hours/day and 7 days/week thusincreasing sales opportunity

• Online presence reaches largeamount of potential customersthroughout the world and is notconfined to local sales

• Online statistical data can be easilycompiled for designing offer andpromotions to be in line withcustomer needs

Better customer service• It is easier to get feedback from

online customers and interact withthem to know their view

• Engaging customer andincorporating their views will lead to

improve customer satisfaction andloyalty

• Virtual communities and socialnetworks can segment the marketfor specific product

• With customer opinions and reviews,better and more effective marketingstrategies can be formulated whichin alignment with customer tastes

and preferences

Cut Cost



Why ebay?

Largecustomer

base

• Over 5 million registered users covering more than 4,306 cities in India• Every 16 min a pair of footwear is sold• Every 3 min a piece of apparel is sold• More than 600 NIKE products currently listed on Ebay

Logistic &payment

• Powership program to manage logistic function on behalf of seller to ease their shipping experience• Fast and accurate shipping by reputed logistic service with lower freight rate due to scale of economies benefit• Efficient, cost effective and secure payment through Paisapay

Data &

AnalyticsSupport

• ebay can make available to Nike crucial sales data and customer feedback of sales, current trends etc.• ebay support for taking informed decision about product customization as per customer needs

• Better marketing tools, advanced analytics report and design help for listing the product

Specialservice to

Nike

• Dedicated toll-free customer service support• Integration with Nike ERP system to help better manage inventory and tackle supply chain problems• Complete control over look, feel and functionality along with maximized store visibility

Time (mm:ss) Unique page views/day Xerion (Jabong) 5:36 5.81 vector (Myntra) 6.07 5.44 Jasper (Snapdeal) 5:25 5.12 Flipkart 7:00 7.97 Junglee (Amazon) 3:36 5.56 ebay 10.15 11.94



Sales Pitch for NIKE• Wider coverage – Tier 2 & 3 cities

• More than 600 NIKE products currently listed on Ebay• Every 16 min a pair of footwear is sold• Every 3 min a piece of apparel is sold• Statistics regarding sales of Apparel and footwear through e-

commerce

• Value proposition for NIKE – Access to large customer base• A vibrant marketplace to sell your product• eBay India has over 5 million registered users. These users

come from over 4,306 cities in India.• At any given time, there are over 2 million live listings on eBay

India ( www.eBay.in ) across 2,000 categories of products inElectronics, Lifestyle, Collectibles & Media verticals.• Approximately 30,000 sellers sell on eBay India annually.

http://www.ebay.in/

http://www.ebay.in/

http://www.ebay.in/



Customer Lifecycle in E-commerce – Impact point of Discount/Promotional Campaign

ReachCustomer

Acquisition

Abandonment

Conversion Retention

Attrition Churn

Loyalty

Discount / Promotional Campaign

Withdraw discount

Discount / Promotional Campaign

Target Newcustomer

Attract old customer who wentto other ecommerce websites

Customer who leftwebsite after addingitems in cart

Abandonment Ratio = Ratioof Abandonment carts tocompleted purchases per

day

In current context, 15% discount will attract first time buyers, metrics to measure impact of first time shoppers & buyers :

Analyzing impact of discount on attracting new customer

Metrics

Conversion of shoppers to buyers Discount has positive impact, If shopper having similar profile

and items in carts purchase the product rather than abandoning Increase in this ratio signify higher conversion for first time

shopper

Data Required Significance of metrics

No. of Abandonment per day

No of purchase per day

Cost per conversion(CCP)=(Advertising & Promotional

Cost ) / Number of Sales

Total Advertising Cost Number of sales

Determines the value of a given promotional effort in givenperiod of time

Low cost per conversion signify higher sales

Above metrics will help to measure the impact of discount / promotional campaign in attracting new customer to the sites. Advertisement cost is incurred in display ads on various websites and social media during the given period of 1 month.

Churn Rate

1. AbandonmentRatio

2. CCP3. Acquisition

Cost

Acquisition Cost = TotalAdvertisement Cost /

Number of Click - Throughs

Total Advertising Cost Number of Ad-banner Click Through Rate

Value of given promotional effort in a given month Low acquisition cost signify better impact of discount and

increase traffic

1. RFM Score2. CLV



Impact of Discount/Promotional Campaign in Customer Retention

RFM Score(Recency, Frequency,

Monetary) = Recency +Frequency + Monetary

Analyzing impact of discount on customer retention

Metrics

Combination of RFM will help to predict the best customer onwhich Ebay should focus.

If customer purchase items worth INR 10000 and his recency is1 month i.e. customer purchase after every 1 month, he willavail 15% discount on his next visit under current scheme.

If for a customer , recency is more than 1 month , but has madepurchase under promotion means that discount offer waseffective by bringing down the Recency

This will also help to identify the customer who have highrecency and high monetary value of purchase , so that they canbe targeted separately.

Data Required Significance of metrics

Recency : Last time sincecustomer visited the website

Frequency : How manycustomer visited in onemonth; frequent purchaser are likely to make repeatpurchase

Monetary value of the

purchase;

Customer LifetimeValue (CLV)

Customer past transactionsand purchases

Socio-demographicinformation

Monetary value of purchase Cost incurred on retention

15% of 10000 (INR 1500) + Advertisement cost will be incurredin retaining customer. Customer Lifetime Value can becalculated by discounting to identify the best customer.

Determine anticipated customer lifetime in months. Future revenue can be forecasted by aggregating CLV of

customers

Churn Rate = No. of Subscribers lost/ No. of

ending subscribers

No. of Subscribers lost No. of Subscribers at the

end of month

This will help to measure no. of new subscribers end in amonth.

Low churn rate signify : Less customer loss More customer addition



What other ideas or m easurements you wi l l s uggest which eBay should inco rporate in i ts strategy to

remain com petit ive in Indian ecommerce market.?

Product Comparison Mobile top-up & Travel, Hotel BookingsProduct Review

C2C model

Group Buying

Print Ads with QR codeMonthly ‘Cyber Mondays’

Real-time chat support Social media connect

A tool to compare different productswithin the same category will aid

consumers buying decision (as done byflipkart, snapdeal etc.)

Aim here is to provide all the onlinesolutions on one single website. In this

context, mobile recharges, travel, hotelbookings etc. can be provided.

Presently, only sellers have reviews onthe site. Product-based reviews shouldalso be initiated.

A sub-domain (similar to OLX, Quikr)can be introduced which will only listsellers and their products. eBay will notinitiate any purchase transaction here.Buyers will contact sellers directly. Thiswill help eBay in gauging buyer interests and customize his/her eBayhomepage accordingly.

A contr act can be signed with fewreputed sellers to allow eBay to controlthem. This can be used to designateone day in a month as a lowest pricesale on few products.

Deals on eBay can be published innewspapers, magazines etc with QRcode beside each product. Consumerscan scan the QR code to buy directlyfrom their smartphones.

• There should be sub-domain developedwhere buyers can place a request for aproduct and his purchase price

• Other buyers can join these requests for placing a group request

• Now, a sellers can see these grouprequests and quote their prices. The

cheapest seller wins the deal• Buyers & sellers can be charged a fee

so that they don’t back out later

An efficient customer care support isvery essential for any online retailer. Inthis direction, eBay can introduce real-time chat support for resolving queriesof various buyers and sellers.

eBay can use buyers’ and sellers’

facebook, twitter pages to post about

their recent purchases or sales. Thiswill help in enhancing brand equity of eBay.

Ebay Case Presentation

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