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Hitwise Intelligence - Analyst Weblogs
07/03/2008 09:04 PM
Putting the dominance of eBay and PayPal into context
During the Christmas shopping period last year I wrote a piece for Inside Retailing about the challenges and missed online opportunities for retailers in the Australian market. It's a good time to revisit this topic in light of the proposal made by ACCC to revoke eBay's PayPal only policy. While eBay's bid has been dropped, it's worth bringing the spotlight on Internet retail activity in Australia.
ACCC chairman, Graeme Samuel made a fair observation about "eBay's position as Australia's leading online marketplace." eBay Australia was the leading website in the Hitwise online Shopping & Classifieds industry in May 2008, accounting for 29.07% market share of visits. The next website to follow was eBay with 4.09% share of visits. During this period, Hitwise tracked over 31,500 websites in the Shopping & Classifieds industry, ranging from comparison shopping websites to the online properties of major retail brands.
Visits to the online Auctions industry are in fact particularly high in Australia. Auctions websites accounted for 38.11% of visits to all Shopping & Classifieds websites in May 2008 in Australia, compared to 21.35% by U.S. Internet users.
This article from the WSJ surmises that "consumers Down Under have plenty of choices of where to trade their goods online." Within the Auctions space, the combined properties of ebay.com and ebay.com.au accounted for 83.3% market share of visits by Australian Internet users during the week ending 28 June 2008.
eBay's nearest competitor, Trading Post Online debuted at 3rd position (week ending 14/06/08) when it launched its auctions service and accounted for 3.78% share of visits during the week ending 28 June 2008. Oztion Auctions followed with 2.53% market share, reaching its highest point ever during the week ending 28 June 2008.
Online Payments
The crunch of the ACCC's proposal however was not about the dominance of eBay; it was about the competitiveness of online payment systems in Australia. In a Hitwise custom category of 20 alternative payment services, that excludes major financial institutions, PayPal is by far the dominant player accounting for 82.24% share of visits week ending 28 June 2008. Google Checkout and Paymate Australia accounted for 1.85% and 0.88% share of visits respectively.
When we compare PayPal against all Business & Finance websites, that includes major financial institutions, it ranked 22nd during the week ending 28 June 2008. In comparison, PayPal ranked at 4th position in the Business & Finance industry in the U.S. market.
Window of Opportunity for Major Retail Brands
With the spotlight on eBay, PayPal and the local sellers who operate on eBay, competing retail brands should be considering the online retail experience they offer. Can they provide a seamless and secure online shopping experience that provides more choice for Australian consumers?
