EBAY EYES INTERNATIONAL MARKETS

Associated Press as presented by the Globe and Mail, 06/24/05


From his home in Shanghai, China, Wang Yun runs a business selling stamps and coins to customers globally. In the United States, Birgit Conlen ships peanut butter, kids toys and hot-dog mustard to buyers in Europe and Asia.


Wang Yun and Conlen have a common bond. They're part of a growing band of small businesses which have bypassed traditional methods of international trade and opted for a more unusual medium: eBay Inc.



EBay, which celebrates its 10th anniversary this week, is an iconic name in on-line auctions. Last year, about $4.2-billion (U.S.) in cross-border trade passed through eBay. That accounted for about 15 per cent of the total value of goods exchanged on eBay in the fourth quarter, up from between 10 per cent and 12 per cent in previous quarters.



Although this avenue of growth brings unique problems for sellers — such as customs and local laws — it also highlights how important international markets are to eBay's continued growth, which some fear may be slowing in the United States. The company already operates local sites in more than 20 countries and plans more expansion abroad, though won't specify where.



EBay said it sees huge potential in cross-border trade; it gives its developed markets opportunity for growth, while bringing liquidity and selling opportunities to newer markets. The company, which gets its revenue from fees paid by sellers, said the possibility of exploring new markets abroad makes eBay more attractive to these sellers.



EBay spokesman Hani Durzy said the on-line marketplace helps match accessible products in one market with others where they're scarce, thereby opening those markets to new businesses.



"There are a more unique set of products available to buyers. Also, it provides economic opportunities for sellers who may be in places where the market isn't functioning as well," said economist Patrick Bajari, who has researched the company's auction format.



About 70 per cent of trading still takes place through the auction-style format on eBay, rather than fixed-price arrangements. Bajari said auctions help sellers establish a price for a product which is tough to value and helps them collate information.



For eBay, one of the big benefits of cross-border trade is the growth opportunities it offers to its sellers in its more developed markets like the United States.