On 20th birthday, e-commerce pioneer takes aim at rivals (see Amazon),
New CEO Wenig says entrusting its 25M sellers is key to winning battle
Devin Wenig, the new CEO of eBay, stands in front of 1,000 sellers gathered inside this city’s convention center and pumps his fist in the air.
“I buy everything in my house on eBay,” he says, to which a woman in the crowd yells out playfully, “You’d better.” Wenig smiles, then continues. “There are technology companies that believe in a future of drones and robots,” he says, digging at Amazon, which is developing delivery via the former and runs warehouses with the help of the latter. “And there are technology companies that believe in connecting people.” The crowd leaps to its feet.
“We don’t want to be like any other company. We are all about you, our sellers. And we are in it to win it.”
At 20 years old this month, pioneering eBay is the oldest significant ecommerce portal on the Web, boasting 157 million active buyers, 800 million listings and, last year, $83 billion in sales ranging from old Levi’s to entire towns.
But if Wenig ’s exhortations here sound like those of a general rallying the troops of a beleaguered army, there’s a reason.
The past few years have been tough on the company founded on a hunch by Pierre Omidyar, whose eureka moment came on Labor Day 1995 when he managed to sell a broken laser pointer to a Canadian techie for $14.
But things really began to turn down in spring 2014, when a massive security breach required eBay users to change their passwords. A few months later, Google tweaked its algorithm to bolster its own online shopping efforts, which led to lower eBay item rankings.
More recently, eBay/PayPal let go 2,400 employees. It failed to boost its seller base of 25 million. EBay now has what it didn’t face in its halcyon days: competition, from niche verticals such as Etsy for crafts and Autotrader for cars to a colossal foe in Amazon Marketplace.
As if it needed more hurdles, eBay split from its more lucrative sibling PayPal in July, which led to scaled-back 2016 sales projections of flat to 5% growth. CRUNCH TIME Wenig is the first to admit this is a pivotal juncture for the company.
“We come to work with urgency,” Wenig tells USA TODAY after his presentation. “Even the strongest e-commerce competitor can get unseated incredibly quickly given how rapidly consumer shopping behavior is changing.”
Wenig touts the company’s brand recognition as a powerful tool to capture a larger share of the $14 trillion global commerce pie, whose online-shopping slice is still a mere 8% and growing.
“Technology has created jump ball on the entire global retail industry,” he says. “There used to be stores and e-commerce was a side show. But at this point, there’s no distinction between the on(line) and offline world, and changes are coming very fast.”
Wenig announced three eBay changes at last week’s Seller Summit gathering: a new Seller Hub that provides sales and inventory metrics; a smoothed-out returns process; and, most significantly, a new suite of mobile apps.
This year, eBay mobile sales hit 51% for the first time. “Each week 12,000 cars are sold on eBay on mobile phones, which I’m not sure I’d do,” Wenig incredulously tells the audience to laughter.
The crowd gets really amped up moments later, when a surprise guest — a boyish Omidyar, who remains the company’s largest shareholder — hops on the platform. Backstage, eBay’s founder had told USA TODAY, “We still have a lot of unfinished business,” but adds that its advantage is that “we’re not an algorithm business, or a machine intelligence business, but a people intelligence business.”
Omidyar conceded Google and Amazon are “great companies, but they don’t have people at their core, they’re not about empowering people like the sellers we see out here today and giving them the tools to make their own futures.”
Wenig, a former CEO of Thomson Reuters Markets, took the reins of eBay after four years of leading its global marketplaces division. He replaced John Donahoe, former head of the combined company, who in turn succeeded current Hewlett-Packard CEO Meg Whitman.
While Wenig fiercely believes that sellers represent eBay’s competitive distinction, he adds that “if we are not cutting edge in our tech, then we won’t win.” LOW EXPECTATIONS EBay is “due for a reset,” analyst Colin Gillis of BCG Partners says. “Their growth has been subpar. But Wenig has a cushion because expectations (post spin-off ) are very low. It’s fair to say they will need to show growth by holiday season 2016.”
To succeed, Wenig needs to not only keep big sellers happy, but convince a new generation of ecommerce sellers and shoppers alike that eBay has something to offer low-margin e-tailers such as Amazon and Jet.com don’t.
“We do have work to evolve the brand,” he says. “That said, we don’t feel need to be all things to all people. We’re good at choice, value and uniqueness in very significant categories. We’re good at movie posters, sure, but I also want to sell you your cellphone. Our 25 million sellers include individuals, small companies and global brands. The three can live together to create the world’s biggest store.”