EBay is reportedly launching a new online marketplace that will allow brands to sell directly to consumers, pointing to a dramatic expansion of eBay’s retail hub and what is likely an offensive move against Chinese e-commerce powerhouse Alibaba.
In a report from research group Macquarie Capital, analysts said eBay’s The Plaza would be similar to Alibaba’s Tmall, a wildly popular and successful shopping website that houses more than 70,000 merchants who sell to Chinese consumers. The site will allow brands to sell direct to consumers using eBay, but in a more controlled area than the traditional eBay auction site.
“They planned to use it as a means to access eBay’s customers without having to worry about weakening their brand,” analysts wrote. “Depending on execution, this could be a meaningful positive for eBay.”
The size of the site and when it would launch is still unclear. eBay spokeswoman Amanda Coffee declined to comment directly on Macquarie Capital’s announcement about The Plaza, but said in a statement: “eBay partners with brands, designers and retailers – and sellers of all sizes – to help them grow their business. As such, we are always exploring new, innovative ways to help them market directly to eBay’s global audience and connect them to the things they need and love.”
She added : “We aren’t sharing anything further.”
The direct-to-consumer marketplace is where many of the big retailers are heading, so it makes sense for eBay to move in this direction. eBay as been on a rip under the leadership of CEO John Donahoe, but the gains have mostly come from the company’s investment in mobile apps and from PayPal, the online payments company eBay bought in 2002.
Meanwhile eBay is staring down the behemoth Alibaba, which while based in China has a strong U.S. presence — it has offices in Santa Clara — and more U.S. companies are selling on the company’s Tmall platform, which recently beat out eBay to claim the spot at the world’s second-largest online retailer, and is positioned to overtake Amazon for the No. 1 spot by 2015, according to an analysis by Euromonitor International. Apple is one of the latest to join Tmall, a sign that the lucrative brands are interested in selling directly to consumers.
Alibaba also owns Alipay, an online payments platform bigger than PayPal and can be used for plane tickets and cab rides, and Taobao, a shopping site that is twice the size of eBay and Amazon combined. The Alibaba Group has announced plans for an initial public offering, and it may do that here, rather than in China.
In December, Colin Sebastian, an analyst with firm Robert W. Baird & Co, predicted eBay would ramp up spending “against competitive threats” that included Alibaba in marketplaces.
News of eBay’s The Plaza come just as the company loses two top-level executives — Hugh Williams, who oversaw development of the company’s new search engine, left this week, and Chris Saridakis resigned as president of the lackluster eBay Enterprise, citing personal reasons.