Because of a recent shift in strategy to establish and project itself as a platform for niche products, eBay now competes with Craigslist and now Facebook Marketplace. With announcements aimed at thousands of years and more assertive pursuit of developing markets, eBay’s CEO recently vowed to attract 100 million shoppers to its website. He mentioned that eBay did not always want to become an online shopping site for everyday items. Rather than directly competing with Amazon, eBay will carve out a niche for itself and draw more customers to its website. One of eBay’s goals is to have a more affluent, single inventory and to open up its site to more shop sellers who can deliver items that customers won’t find anywhere else.
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Although eBay has a significant advantage in terms of its well-organized marketplace platform, large sale network, global acceptance, and nearly two decades of marketplace auction site experience, Facebook has a significant advantage in terms of user numbers, user engagement, and easy contact with sellers/fellow Facebook users. Since you have mutual friends (with the seller), personal User profiles (for a seller check), and a simple feedback process, it will probably be easier to find reputable sellers and products within your local community on Facebook.
eBay’s User Base & Impact On Valuation
Facebook has over 1.7 billion monthly active users (MAUs), with 450 million users frequenting buy-sell Facebook Groups per month, compared to eBay’s 164 million active users. This gives Facebook a major advantage in developing a marketplace site, and eBay’s user growth forecasts will suffer as a result. We expect eBay’s active user count to rise from 165 million in 2016 to around 213 million by 2023, which is a key driver of its valuation.
A faster or slower rate of user growth has a direct effect on eBay’s valuation. The total active users on eBay are expected to gradually increase as the company works on many initiatives to make its site easier for buyers and sellers, including a campaign to attract millennials and users from emerging economies. If the company achieves its CEO’s goal of adding 100 million new active users in the next three years (and maintains steady user growth thereafter), our price estimate could increase by more than 30%. However, if the company’s consumer base only grows to about 180 million by the end of our forecast period, our price estimate may be lowered by 10%.