ebay’s multichannel hopes cool – will Paypal jump ship?

In 2013 mobile brought both eBay and PayPal more turn-over than expected. Rather than 20 billion, eBay generated 22 billion US and PayPal made it to 27, rather than 20 billion. So far so good, but it could be better.

Investments in mobile and stationary trade are developing sluggishly and are becoming a milestone around the neck of fast growing company PayPal. After eBay successfully realigned itself with a focus on mobile three years ago, it was thought that the company’s future would lie here.

However, their efforts with stationary trade didn’t really bear fruit, but not for lack of initiative: for instance, eBay regularly researches statistics on the future of trade, works on shopping directly from the display window and same day delivery via local stores.

Multichannel and mobile payment are developing more slowly than expected.

The reason given for this is that the digitalisation of the online world is making slower progress than expected:

» In general, I’d say that offline is taking longer to become digitized than we initially thought.

John Donahoe «

Another reason for the less than satisfying development is the persistent diversity in the area of mobile payment. The provider and technology provider market is still cluttered and confusing, and customers see little merit in it. Multi-channel has arrived in neither the customers’, nor the traders’ heads. People are still experimenting, instead of offering a comprehensive solution.

PayPal spin-off?

The first investor in the Earnings-Call area has already requested PayPal’s spin-off. The idea isn’t all that far-fetched, after all, PayPal is responsible for a proud 42 percent of eBay’s entire turn-over, and could grow faster without the mother ship. The way for further cooperation with individual (eBay) competitors would be clear. However, Donahoe rejects the idea.

(PayPal remains eBay’s growth driver: Turn-over of eBay segment marketplace and payments – in million US)

eBay maintains their stationary strategy

According to eBay, this is no reason to give up. They will continue to tread the way of stationary, however will focus more strongly on show-case projects to achieve viral effects. For instance, “eBay now” is supposed to be rolled out and tested in more cities.

By the way, we will discuss the topic Multichannel at our Handelskraft E-Commerce Breakfast in Munich and Zurich: