Is eBay Focusing On Brand Building?

In a recent blog post, eBay (NASDAQ:EBAY)  announced that it will soon launch a branded supplies store, featuring eBay branded boxes, envelopes and tape — with more items to be added in future. The company stated that this move has been prompted by a demand from sellers who were looking at cost-effective, convenient and eco-friendly eBay branded shipping supplies. As the company works on a transformation program, it is looking to provide sellers with conveniences to encourage them to sell on its platform. The company recently extended its partnership with shipping and packaging company Shyp into the Los Angeles market, providing sellers the convenience of getting the products sold on eBay packed, picked up and shipped to the buyers.  We believe that shipping supplies should increase seller convenience, which in turn will give eBay brand recognition and change its image from a “second hand “ products marketplace to an e commerce portal where a wide range of products can be purchased and sold. This should help in the company’s turnaround strategy and enable it to increase market share in the long term.

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Brand Building Can Help eBay’s Transformation

Earlier this year, eBay’s management stated that the company is working on a turnaround plan which includes improvement of its inventory by curating unique products offered by boutiques and handmade products created by various artisans. Making its platform simpler for buyers and sellers was also one of the goals of this transformation plan. As the company launches its supplies store, we believe it will help in creating a brand appeal for the company. While products which come from other e commerce websites such as Amazon in branded shipping boxes are fulfilled by these websites in some form,  eBay will allow sellers to purchase its shipping supplies and use them to pack orders. Sellers will be free to use their own boxes for packaging if they desire so. We believe that, as the company sees an uptick in the use of its shipping supplies, it should be able to refine its brand building exercise by making branded shipping mandatory for some sellers and exercising greater control over packaging and shipping of some products.

eBay has been struggling to establish itself as a strong player in the e commerce market, especially after its split with Paypal. The company faces intense competition from players such as Amazon, which operates as a marketplace in some regions such as India. eBay could not gain a significant market share even in international markets where it had a first movers advantage and lost to local players who came in much later. The company is now working on initiatives to revive itself and increase its market share in the growing e commerce market. We believe a brand building exercise initiated by way of branded shipping boxes should work in its advantage attracting more sellers and buyers to its platform.