EBay "s market share in consumer-to-consumer auction is estimated 70%-80% of the market, with growth of 10% assumption, the estimation of auction listed items is nearly 47 Million in 2004, and market share will be increase up to 85-90% of the total market in the next five year.
As a whole, the internet population is younger and better educated that the general population. Most of online shoppers are in developed countries where the payment by credit cards is popular, and high security in credit card information, and privacy information. The online shoppers have difference purpose and hobby when they decide to make a purchase through internet. .
Based on the structure of the market, the customer preference, it is best to analyze this market on a segmented basis.
Nature of competition .
In the online auction business, the barriers to entry are low, and current and new competitors can launch new sites at a low cost by using commercially available software. eBay directly competes with all other exits competitors, the closest competitors were Amazon, Auction Universe, Yahoo, Excite's Classified2000. In 1998 eBay estimated that its share of the person-to person auction market was 89%, Onsale Exchange and Excite auction each had less than estimated 2% of the market, with other smaller players having a combined 7%. However, recently, Yahoo and Amazon have entered to Person-to-person business and become the most dangerous eBay's competitors. .
Some of competitors, for example Amazon and Yahoo, have famous brand name, long operation history and large customer base. They also have strong financial resources and the same technology and have ability to do the same marketing strategy as eBay do.
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Most competitors haves adopted advertising and promotion program which focus on lower fees and commission, promoting safety and security, provide more features for shopper's convenience. Specially, Amazon recently extended its business to Business-to- Consumer auction, but they are going to force sellers and buyers to use their payment system.
