Case study for C2C Commerce

Group Members Dhanalaxmi Asmita Soren Amit Murmu Ankit Adarsh Ravi Anuja Nishi Shreya Kirti Avinash Swarnkar Shashi Rani

‡ What is C2C Commerce? ‡ C2C (Consumer-to-Consumer) There are many sites offering free classifieds, auctions, and forums where individuals can buy and sell. ‡ eBay's auction service is a great example of where person-to-person transactions take place everyday since 1995.

‡ Internet auctions appeared on the scene in the mid 1990s ‡ eBay set the standard for features and performance in C2C markets ‡ eBay Inc. is an American Internet company that manages ‡ An online auction and shopping website in which people and businesses buy and sell a broad variety of goods and services worldwide ‡ Majority of the sales take place through a set-time auction format ‡ Established localized websites in thirty other countries ‡ eBay Inc. also owns PayPal,StubHub, Kijiji, and other businesses

Key Peoples
‡ Pierre Omidyar Founder and Chairman ‡ Chris Agarpao was hired as eBay's first employee and Jeffrey Skoll was hired as the first president of the company in 1996. In November 1996 ‡ Meg Whitman President and CEO in 1997 ‡ Current CEO's John Donahoe's

‡ A global trading platform where practically anyone can trade practically anything ‡ Anything legal, new and old can be bought and sold ‡ Core business Used goods ‡ Sale of Obsolescent goods ‡ 50 million items are available for sale at any given time

C2C History &
‡ the Web developed in the early 1990s ‡ auctions were conducted via e-mails and newsgroups . ‡ At first, sellers simply provided a static source of multimedia information (i.e., text and images) about the products being auctioned and continued to collect bids via e-mail

C2C History &
‡ EBay, founded in 1995, was among the earliest known auction services available on the Internet. ‡ But has to face competition with B2B players. E.g. ‡ within a year eBay had many competitors.

C2C History &
‡ Internet auction platforms were developed in research laboratories in 1996, including the Michigan Internet AuctionBot (Wurman, Wellman, and Walsh, 1998), the FishMarket system (Rodriguez, Noriega, Sierra, and Padget, 1997), and GEM (Reich and Ben-Shaul, 1998).

C2c History &
‡ . Among the best known of the auction service providers were OpenSite, Trading Dynamics, Moai, and FreeMarkets. Free Markets was founded in 1995 and Moai formed in 1996. ‡ OpenSite and Trading Dynamics were acquired in 2000 by, respectively, Siebel Systems and Ariba. Around the same time, IBM was building its own auction engine (Kumar and Feldman, 1998)

C2C History &
‡ In the early days of e-commerce, it was logical for auction software companies to design flexibility into their products so that they could be employed in many application markets. ‡ The amount and type of customization depends on the particular details of the target market, and whether the auction engine was slanted more towards B2B, B2C, or C2C applications

Auction Concept
‡ the term auctions tends to bring to mind the classic situation with a seller offering a single item to the highest bidder, like eBay or the stereotypical face-to-face auction ‡ the parameterization which affects the choice of an auction system are: a) Bidding rules b) Intermediate information c) Clearing

Bidding rules
‡ Bidding rules define the types of bids that are allowed and which participants are allowed to place them. Bidding rules are different for : ‡ single seller auction ‡ Open continuous double auction ‡ Multiple trade auction

Intermediate Information
‡ Auctions that generate no intermediate price information are called sealed-bid auctions. ‡ However, the vast majority of online auctions generate intermediate information to help guide the bidders.

‡ The final collection of rules determines when and how an auction computes trades. The act of computing trades is called clearing, and is handled by a well-defined policy instantiated as analgorithm in the auction software. An auction may clear whenever a bid is received (i.e.,continuous clearing), when no new bids are received for a specified time (e.g., the typical auction), at a prescribed fixed time (e.g., eBay) or on a prescribed schedule.

Auction Types in
‡ Auction-style listings ‡ Fixed price format ‡ Fixed price format with best offer

Growth & Expansion Of Ebay
‡ ‡
Founded in September of 1995, presence in 39 markets, including the U.S. ‡ approximately 276 million registered users worldwide. ‡ Marketplaces net revenues totaled a record $1.5 billion in Q4-07, representing a year-over-year growth rate of 21 percent.

sources of Revenue
‡ ‡ ‡ ‡

The U.S. Business The International Business Online Payments returns-based Operations

eBay - A Great Global Business
Presence in 39 Markets

Americas USA Canada Argentina* Brazil* Chile* Colombia* Costa Rica* Dominican Republic* Ecuador* Mexico* Panama* Peru* Uruguay* Venezuela* *MercadoLibre sites Europe Austria France Ireland Netherlands Spain Sweden UK Belgium Germany Italy Poland Switzerland Turkey

Asia Pacific Australia China Hong Kong Japan India Korea Malaysia New Zealand Philippines Singapore Thailand Taiwan

eBay site

Minority investment


‡ As export/import demand grows, eBay has to think about what key areas can further support users«.
± Customs: Partnerships or content support to help make customs easier to be understood by both buyer and seller. ± International Shipping Support: How to be the leader in the international shipping done online. ± Translation: What technologies can help users scan the world easier for global bargains? ± Global Matching: Can eBay get more involved in settling international supply and demand imbalances?

as a global commerce community
‡ Global Membership: Users get access to all our sites all around the world and carry their track record with them. PayPal: Universal payment service unique in its ability to handle multiple currencies and multiple funding options. eBay Site Integration: Discovering ways they help ´localµ sellers get more visibility abroad . Global Buying Portals: Shipping support and eBay content translation in order to support buyers from all over the world. Courier Partnerships: Teaming with some of the largest couriers in the world including UPS, USPS, Royal Mail, and Deutsche Post. ‡




Five Force Analysis

Substitute products

Rival firms


New entries

SWOT Analysis 
First mover advantage  Large and impenetrable market share  the scale of bidders &sellers  No traditional retailing cost structure  Decrease in growth rate  Trust issues between buyers & sellers  Oriented in P2P market  Community power

S O 
e-Commerce is increasing  Chances for M-commerce M Possibility to expand high cost product

W T 
Simple and easy to imitate  Fraud trading (Trust Issues)  System Security & reliability

marketing strategy: Face book Proposal
‡ Joint venture with ‡ Student-to-student transactions for used textbooks ‡ Expose college students to eBay auctions ‡ Future options with

‡ Yahoo! [May 2006]
± Exclusive 3rd party provider of all graphical advertisements ± Online payments, co-branded toolbar, & ³click-to-call´ functionality

‡ Google [Aug. 2006]
± Exclusive provider of text-based advertising outside US ± ³Click-to-call´ integration

‡ Investment in IT- Computer software and hardware valued at $670 million ‡ Annual IT spending exceeded $2oo million ‡ Team of highly qualified professionals ‡ Category manager ways in by which sales can be better presented and merchandised ‡ Detailed scrutiny by specialists ‡ Stays in touch with users- feedback


ebay net revenue by territory

In Japan
‡ eBay didn t succeeded in every country there were failure also. ‡ With a good global track record and with little public fanfare, eBay launched its Japanese site on February 28, 2000. ‡ Two years later when eBay pulled the plug on its Japanese operations, they reportedly held an insignificant 3% of the Japanese online auction market

In Japan
‡ eBay had been pulverized by Yahoo! Japan Auctions-launched to immediate and enormous success approximately six months prior to eBay's entry. ‡ Whereas eBay charged commissions of up to 5% and required acutely risk-averse Japanese users to submit credit card information on signup, Yahoo! Japan Auctions charged no commissions and met the particular needs of Japanese users to a tee.

In Japan
‡ three key mistakes that eBay committed: 1. Firstly, they hired the wrong person as country manager. 2. Secondly, they tried to force Japanese consumers to fit the company's American-centric service model, rather than modifying the company's service model to meet local market needs. 3. Thirdly, they did something that American companies are notorious for-- grandiose announcements about their entry into the Japanese market.

In Japan
‡ Japan was critical to eBay s success because it was the world s second-largest Internet market. The gap had to be closed soon otherwise Yahoo Inc. could easily beat it in the rest of Asia. Yahoo Japan was the No. 1 or No. 2 portal everywhere except China. In December 2007, Yahoo Japan and eBay made a deal to link their auction sites and make it easier for their respective users to bid on and buy goods available on each other s sites.

In India
‡ Indian e-commerce biggest success stories is eBay India. ‡ After the dotcom bust, several e-commerce players left the sector because they either thought it was too early for India, or it was not meant for India. ‡ was acquired by eBay Inc in 2004.

Success in India
The things that made eBay India do better are ‡ eBay India emerged more as a fixed-price market than an auction platform. ‡ Auction is the second highest, followed by classifieds. ‡ cash on delivery option and seller ratings. ‡ eBay came up with an enhanced version of Paisa Pay in 2007

Success in India
‡ ‡ ‡ ‡

Transactions are done domain specific. Each domain has a category manager. eBay India s Buyer Protection community . eBay presents a great entrepreneurial opportunity for Indian sellers to sell products internationally to millions of eBay buyers worldwide.

Trends in India
‡ I ) eBay India provides great entrepreneurship opportunities ‡ 2) English speaking countries are a large market for global trade . ‡ 3) Indian sellers are seeing tremendous success with products such as Jewellery, Apparel, Collectibles, Furnishings and Musical Instruments.

India goes mobile
‡ Ebay India is in the news for apparently looking to launch its services on mobiles in India in the yr end 2010. ‡ 1800 number which were started in year 2009 for users to dial in and transact on eBay India. ‡ Reason to go mobile : Indian market size is 9500 crores. E-commerce which is e-tailing is 1200 crores and overall market is growing at about 30%.



‡ Scheduling Actions ‡ Notification: 1. Emailbased notification is a push technology. 2. Web-based dissemination is a pull technology. ‡ Scaling: An auction site manager should be concerned with at least three types of loads: page views, bidding actions, and internal actions like clears and quotes.

E-Com Model

1st Step : Registration

2nd Step : Interaction

3rd Step : Transaction

Designing with UML notations
‡ The auction system in ebay was designed using the 1) Use Case, 2) Sequence, 3) Class & 4) Component Diagrams offered by UML and the Rational Rose Tool.

Use case Diagram

Purchase Use case Diagram

Class Diagram

Sequence Diagram

Component diagram

Calculating bidding price
‡ ‡ ‡ ‡ ‡ K = (HP SP) PABC = (PEP PSP) / (PEP PB) Speed = (K/PABC)*1.2 Medium = (K/PABC)*1 Leisure = (K/PABC)*0.8

Where K is the amount of money that can be bid HP is the highest forecast-price of products SP is the seller s suggested starting price. PABC is the average amount of the previous total bidding prices that the bidder has bid PEP is the ending price of the product in the previous bidding PSP is the starting price of the product in the previous bidding PB is theprice of products in the previous bidding (PB)

‡ Fraud 1. non-delivery 2. shill bidding 3. multiple bidding 4. feedback extortion 5. and false reports of fraud

‡ Censorship: 1. The global reach, relative openness, and anonymity afforded by C2C auctions permits the posting of politically incorrect material or product. 2. content submitted to the site to be sure it is appropriate for minors, or create a gateway for minors.

‡ Abuses in auctioning ‡ Maintain trust ‡ Worms and Viruses: Continuous up gradation of hardware and software not only keeps pace with demand

Challenges main competitors

Combating Frauds
‡ Reputation Management: Reputation mechanisms are another common method of combating the fraud that often comes with the freedom afforded by anonymity ‡ Payment and Escrow: C2C auction sites increasingly offer extra services to improve the security and efficiency of the marketplace

Integration issue on
‡ The integration issues on a C2C auction site are different since all auctions sites share the same core functionality which are: 1. admit bids 2. generate information 3. and clear. ‡ A public C2C market like eBay has different requirements than a one-time procurement auction with certified participants

‡ Sustainable in short term by buyers & sellers ‡ Complacency due to its position ‡ Facing increased competition from Goggle and Microsoft ‡ Competitors are providing free services to capture market share ‡ Technology can be easily replicated

‡ Make new acquisitions ‡ Continue to go global ‡ More on-site advertising and make eBay item positioning free ‡ Proactive approach to compete with new products developed by Microsoft and Goggle ‡ Need to continuously improve it services and technology to maintain differentiation

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