Detailed S.W.O.T Analysis of eBay

eBay is an American e-commerce website that was founded in 1995 by Pierre Omidyar. It is a multinational online marketplace, an e-commerce website that provides consumer-to-consumer (C2C) and business-to-consumer (B2C) sales through its website.

In this blog, we shall take a look at the SWOT Analysis of eBay that includes its strengths, weaknesses, opportunities and threats in-depth. Let’s get started by learning more about eBay.

 

About eBay

eBay’s business office is located in San Jose, California and it has approximately 14,100 employees working for the organization. 

The eBay company foresees and manages the e-commerce website, online auctions, and various shopping websites in which the audiences buy and sell products worldwide.

At its current status, it is ranked at 295 in Fortune 500 rankings which is an overall increase from its previous position in 2019. The website has grown eventually with an increase in revenue in 2020, which rose from its global online marketplaces initiated from the money paid by eBay’s sellers.

Now that we know the company’s business better, let’s understand the reasons for the success of eBay along with its Strengths, Weaknesses, Opportunities, and Threats (SWOT).

 

SWOT Analysis of eBay

 

SWOT Analysis is an important evaluation of a firm to know about its Strengths, Weaknesses, Opportunities, and Threats. Strengths encourage a firm to grow more whereas weaknesses help to improve and know what sorts of practices it can avoid. A company needs to hop onto the opportunities to encourage developments for the future. On the other hand, threats can have a negative impact. Thus, it is important to balance and anticipate the futuristic and the present values of the firm.

Let’s go through the detailed SWOT analysis of eBay.

 

1. Strengths of eBay

Strengths help a firm to efficiently accomplish its successful attempts to reach its aims and objectives. 

Let’s dig deeper into eBay’s Strengths.

 

• Growth of Active Buyers: eBay grew its business and number of buyers by adding 11 million customers in 2020 and around 185 million new progressive buyers. The achievement was higher and rapid than any past growth of the company. 
• Most Globally Leading in the Marketplace: The company has been in the market for 26 years and is the greatest e-commerce online platform for 182 million audiences. The net revenue has increased straight up to 19% and above from $8.63 billion in 2019.
• Artificial Intelligence (AI) with a Strong Business target:  AI is used on eBay websites to aid in data analytics for various online research and to suit client needs and focusing mainly on both B2C and B2B e-commerce around the world.
• Extensive Range of Variety: The wide range of products has been a boon to the company as there is a broad spectrum of buyers and sellers who seek a variety of products to invest in. This creates a keen interest in the customer’s desire and actions of buying and selling. 
• Free Shipping Policy: The free shipping policy is applied to almost 71% of its product purchases. This helps the corporation to gain and attract customer’s attention.
• Growth Amidst the COVID-19 Pandemic: The turning point was when the company did not subside or collapse amidst the pandemic and rather increased more with the highest number of users of 8 million customers. Later in the second half, eBay freshly gained 3 million new customers at its website. 

 

2. Weaknesses of eBay

The intrinsic factors of each firm affect it rigorously. Thus, weaknesses too can hinder a company’s progress. But identifying them helps to recommend changes to course correct in an upward direction.

The weaknesses of eBay are as follows-

• • Tenacious Competition: Due to the strong competition in the market in this e-commerce era, eBay has a long way to go to be more successful. It was ranked as third in the market but eventually, when Amazon stepped into the market, it ranked higher than eBay. Thus, Amazon is still the largest competitor of eBay and is the most successful one. 
  • Technical Glitches on eBay’s Website: Technical issues occur at almost every server and that can be ignored. But, due to certain technical glitches, the customers have a difficult time and thus this leads to dissatisfaction and affects the buying and selling attitude. 
  • Spurious Sellers and Products: There are a large number of fraudulent vendors on eBay. Despite the company’s best efforts, these types of merchants continue to exist. This is, in reality, a significant brand weakness that harms the brand’s value.

• Restricted Sensory Experience:  Customers on the website have a limited sensory experience during virtual purchasing adventures. It may have an impact on client fulfilment while purchasing items such as clothing and food.

 

 

3. Opportunities for eBay

Opportunities are aspects in the external environment that the firm regards as having the potential to generate value in the future. Let’s see the opportunities that can be seized by eBay. 

 

• Expansion of the Product Variety and its Market: Although the website has a variety of products and has a global reach, the expansion of its product portfolio is a necessity. 
• Effective Marketing: For a more effective approach, the company should invest more in its marketing and should find new and innovative strategies to gain more customers, as this will lead to faster development. Marketing effectively approaches greater sales of the products and can be a beneficial investment for the company’s future. 
• Persuasion of Relucting Customers: Customers who are averse to shopping online can be persuaded to do so.
• Niche Marketing Strategy: eBay launched exclusive products to retain its customers in 2020. As of 2021, eBay should maintain the same strategy by concentrating more on launching new products every month as far as possible so that customers do not shift focus to other e-commerce websites and the company can also try bulk selling by collaborating with other companies. 

 

 

4. Threats to eBay 

Threats are external factors that could obstruct the company’s ability to achieve its objectives. Below are some of the threats to eBay-

• Rise of Strong Competitors: As time passes, the company has to cope up with its losses and march towards successful landings. In today’s era, it is difficult to keep an umpteenth amount of strengths to gain customers. The increased competitors like Amazon and Alibaba have evolved around the world so much that eBay has started lagging. 
• Government Taxation Policy: Certain decisions of the government can lead the firm into adverse interruptions such as the taxation policy where the company might suffer in the future. 
• Security Threats and Scams: Many online fraudulent activities can be a subject of concern for customers visiting the website. If the website has a false representation and duplicated products along with negligible security, the website’s reach will decrease and the customers will not visit the website again.

 

Conclusion

 

By reading the above analysis, you must have learned that eBay is a leading e-commerce website that provides global opportunities for buying and selling products. As of 2020, eBay had wide opportunities and higher profits due to the pandemic.

A major takeaway was that eBay can launch and promote its products more on social media as it has a higher reach and more target audiences. While the company has distinct various products on its website, it can improve more in the future by providing a wide range of products to gain the attention of the customers and satisfaction. 

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