eBay Is Increasing Focus On Delivery Through “Shutl” As Competitors Reduce Delivery Times

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Recently, eBay  (NASDAQ:EBAY) announced that it will introduce a new delivery service later this year,  Aimed specifically at small and medium sized sellers on its platform, the service is being built by Shutl, the company it acquired in 2013. This service will focus on making deliveries easier and allow these sellers to make faster deliveries in line with high customer expectations.  As the e-commerce environment becomes increasing competitive, delivery is a key area which differentiates players. Amazon recently cut its delivery times for small flat items being shipped by overseas manufacturers to the U.S. from eight days to five days; differentiating itself from competitors in cross-border e-commerce. We believe eBay’s focus on providing convenient and faster delivery options for its sellers is critical for its growth and competitiveness in the e-commerce market.

Faster Deliveries Can Provide Competitive Edge, Attract Sellers

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As eBay embarked on its turnaround program, the company has remained focused on making its platform easier for buyers and sellers to transact business. It has taken several initiatives to attract more users on its marketplace and an increase in the number of active users on its platform can impact the company’s valuation positively.

Quick delivery has been one of the factors which led to Amazon’s dominance in the U.S. e-commerce market. While eBay could not compete strongly with the leader, the company is now working on improving its market share in the e-commerce segment.  Small businesses are a key area of focus for eBay and it aims to bring more boutique sellers on its platform to provide a rich and diverse inventory of unique products for its buyers. In order to promote small and medium enterprises, the company has taken several initiatives such as introducing its shipping supplies store where sellers can purchase eBay branded shipping boxes for their deliveries.  It is also tying up with other marketplaces to allow sellers to take advantage of multiple platforms for sale. The launch of a new delivery platform with Shutl is another such initiative which should improve seller convenience. Faster delivery options on eBay should attract more buyers to its platform, thus boosting transactions.

We believe that, for eBay to compete with large players such as Amazon and Alibaba, eBay will require differentiated inventory, along with an efficient e commerce platform that allows easier search and  faster delivery. Small and medium enterprises with their unique inventory can become key engines of growth for eBay.  As such, the company’s strategy to support these enterprises as they increase their sales should show results in the long term.

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