In June 2011, eBay acquired GSI Commerce, Inc. which provided commerce technologies, omnichannel operations, and marketing solutions for large, nationally recognized retailers and brands. GSI was rebranded as eBay Enterprise last year and has developed technology partnerships with big retailers including Barnes & Noble, Toys “R” Us, GNC Holdings, Aeropostale, Dick’s Sporting Goods, NBA, Radio Shack, and PBS. Last month, eBay Enterprise announced that the company has added 228 premier brands and retailers in 2013.
eBay Enterprise accounted for 7% of the company’s total FY 2013 revenue. Revenue was up 3% to $1.1 billion for the full year but down 2% for 4Q 2013 due to growth pressured by merchant and channel mix, and reduction in take rate. Marketing services revenue growth was impacted by replatforming and branding efforts to consolidate nine companies into one. These companies are ClearSaleing, e-Dialog, FetchBack, GSI Media, M3 Mobile, MBS, PepperJam Exchange, Silverlign, and True Action.
The segment generated $1.8 billion in merchandise sales in 4Q, up 11%, and $4.2 billion for the full year, up 14%. eBay Enterprise enabled its clients to grow same-store sales 13% in the quarter and 15% for the full year, outpacing e-commerce growth rates in the U.S. While the company operates on a global basis, nearly all of its net revenues in 2013 were derived from its North American operations.
eBay said its enterprise clients are increasingly adopting technology from across the eBay portfolio: PayPal has 97% coverage with growing utilization of Bill Me Later; Marketplaces has 33 Enterprise accounts live on its platform and growing penetration of its eBay Now platform.
In November, eBay announced that Magento would become a part of the business unit bringing forward scalability, flexibility, and customization to multi-channel retailers including Rebecca Minkoff and TOMS. In 2011, eBay acquired Magento, the open source e-commerce platform that was combined with other solutions to form a unit within eBay called X.commerce.
CEO John Donahoe believes that unlike Amazon, eBay holds no inventory. eBay is just a commerce and payments platform that is supporting the small and large retailers to compete against Amazon in the changing retail environment. The company has seen criticism for doing away with the auction model that was the reason for its success, and for creating a model too similar to that of close its rival Amazon. Moreover, the policy of allowing smaller businesses and individuals to compete against major retailers on the same platform have left some smaller sellers dissatisfied.
eBay Enterprise operates three primary lines of business: commerce technologies, omnichannel operations, and marketing solutions. Each of these three primary lines of business complements the other, which allows for cross-selling opportunities.
To see how online retailers are affecting brick-and-mortar retail businesses, see Must-know: Does e-commerce mean the end of malls?
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