Wednesday, November 26, 2008

The steady decline of eBay - blogs

Nielsen's traffic data shows a steady decline in US eBay user numbers going back to the start of last year, Silicon Alley Insider notes. Factoring seasonal trends, like growth in the long month of January (presumably when everyone tries to flog their unwanted Christmas presents) and a dip in the summer, there is still an decline in average unique user numbers in those 21 months. By October this year, unique users were down 10% year on year, page views down 33% and the average time spent on the site per user had dropped 19%.


What is the cause of eBay's problems? Henry Blodget blames eBay failing to turn the business around, as well as overpricing and competition. We'll need to be further into the recession to see if difficult economic times mean far less people spending money on luxury second-hand stuff on eBay, or of the site might actually see some evidence of people trying to make essential extra cash by selling stuff they don't need.

But even if that is the case, eBay users have been frustrated by various rule changes, and the introduction of bulk retail listings in August this year that reinforced a very different direction from the home-seller users that got the site going. And as eBay moves towards a larger-scale retail model, and alienates the 'amateur' sellers who one formed its core audience, so sites like will continue to thrive.

• Update: More data on eBay; this time, UK figures show the site actually continuing to increase its UK audience in the past year.

Nielsen recorded eBay with 14.447 million unique users during October 2007 which, with some more of that seasonal wobble, rose gradually to a record 15.841 million unique users last month. That's year-on-year growth of 9.6%, according to Nielsen.

So how can eBay in the US be losing 10% of users in a year, while the UK gains 9%? Analyst Jim Clark of Mintel said there's a definite credit crunch factor: "UK consumers are the most sophisticated in Europe and it makes sense that they would be trying to do more online to extend the value of the pound," he said.

Mintel research had shown that between July and October there was a 5% increase in visitor numbers to price comparison sites in the UK, and consumers are also spending more at supermarket sites. That means consumers are "removing the possibility of impulse buying," said Clark.

eBay's decision to stop allowing negative feedback was extremely controversial with that original audience of lone sellers, and users will also have been inspired to try rival sites with lower listing fees. "eBay is the main price point, so that is the price to beat. Generally, consumers are more aware of other sites [like Etsy]."

Clark also added that security is a factor; consumers will prefer established brands they know rather than web entities.

The UK has heavy broadband penetration, and may well be ahead of the US in trends. Further into the recession eBay will have a clearer idea if it is working in its favour, or against it.

Perhaps, as one Twitter suggested, eBay might end up trying to offload Skype, the well-respected VOIP service it acquired in 2005.

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