Here’s How eBay Is Looking To Tap Facebook Users

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eBay

Recently, eBay‘s (NASDAQ:EBAY) smart personal shopping assistant “Shopbot” debuted in beta (test mode) on Facebook Messenger. Powered by artificial intelligence, this assistant can help online shoppers find the product they are looking for, based on their preferences and budgetary considerations. This is one of the eBay’s initiatives to develop a new e-commerce experience which uses artificial intelligence and cloud computing to simplify online shopping. Facebook’s messenger processes one billion conversations every month and given its huge user base, this is an apt platform for eBay to debut its shopping assistant.  As eBay looks to differentiate itself from other e-commerce players, offering rare and unique inventory, tapping into social media can help the company attract more users to its platform, in our view. The Shopbot is currently in beta mode and will need a few iterations to provide “real” conveniences to users,  However, we believe this feature has strong long term potential and with its image search feature it can give eBay the competitive edge.

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Filling The Search Engine Gaps

Through its Shopbot, eBay is looking to fill the gaps users face while searching for a product in a search engine. Its shopbot can search for a product based a picture provided by the user – a feature aimed at making it fairly simple to find the exact product the user is looking for. While the bot might not work perfectly in the first few attempts, eBay claims that since it is powered with artificial intelligence, it will improve as the number of interactions increase. The e-commerce market is getting more complicated for users to navigate and find “exactly” what they are looking for. Several players are now looking at shopping assistants to do this job for their consumers. eBay’s attempt looks promising as image based search on Facebook messenger should attract users. Furthermore, the debut of this bot on Facebook appears to be a good strategy.  As the bot learns through the increase in usage, consumers are likely to invite their “friends” on Facebook to try the service out,  In this way, eBay can potentially capture more users.

The number of active users on its platform is a key driver of value for eBay, according to our estimates. We expect this number to increase from around 165 million in 2016 to nearly 213 million by the end of our forecast period.

As eBay works on several initiatives to attract more users to its platform, including the recent beta launch of its Shopbot, if this number increases at a rapid pace, there can be an upside to our price estimate.

While eBay’s Shopbot still has a long way to go and might not attract users immediately, we believe it holds strong long term potential. Furthermore, it can work as a way for eBay to market itself indirectly on Facebook and thereby attract more  “curious” users.

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