As eBay UK turns 15 today, its future has never looked brighter, according to an economist from The University of Manchester.
Since its launch in August 1999, eBay UK has had to compete with new online sellers in the form of social networking sites like Facebook and Twitter, as people use them as a selling platform.
But Dr Omer Edhan, an economist from The University of Manchester, says eBay UK is still as popular as ever and will remain unrivalled by people buying and selling on social networks.
“Buying on social media is a bit like popping to the corner shop for a pint of milk,” he said.
“eBay is the modern equivalent of a department store which offers a wide range of products and houses a collection of smaller retail units under its roof.
“Retail opportunities on social media are more like a convenience store because they provide a limited amount of merchandise to a more select customer.
“Because social media wasn’t originally designed for ecommerce it means that customers have to know where to find what they are looking for.”
eBay allows the seller to sell unwanted second hand items and allows the buyer to get deals that they wouldn’t usually see on the high street.
And Dr Edhan believes this economic model works as there are more people and more sellers which are able to interact with each other.
“The market conditions on eBay are ‘thick’ because there are lots of buyers and sellers coupled with how well the search function works,” he said.
“Thick market conditions are created when the chances of a deal being closed are much higher.”
He also cited that the ‘buyer feels reassured that their transactions are safe’ and that they are ‘going to get the item they paid for and that it is what they expected it to be’.
However, Dr Edhan described social media’s market as ‘thin’ as these platforms are not designed to encourage sellers to participate; this means that the seller would expect lower revenues.
“The market conditions on Facebook create ‘thin’ markets because the selling groups are more niche and will only work if there is a large enough set of people who care about that niche so that the site can attain critical mass,” he added.
“Social media platforms are not designed to encourage sellers to participate.”
Like a retail outlet, Dr Edhan explained, there are many different shops and like that, there are many opportunities when selling online.
And that because of this, eBay UK’s structure is being copied by many others as they go from strength to strength.
“The main secret of eBay’s success is the model of its online auction platform which is continually being replicated by its competitors,” said Dr Edhan.
“Thanks to the rise of digital, never before has it been so easy to find and buy the retail products consumers want to have.
“There is a science to making customer journeys that work as intended.
“It is therefore crucial that eBay continues to ensure it can extend the ecommerce platform even further in order to stay ahead of its rivals.”
Image courtesy of Karlis Dambrans, with thanks