The online auction site is hoping to make a splash with its European customer service centre, writes Jamie Smyth, Technology Reporter.
The eBay phenomenon took a another step towards changing how people shop in the Republic with the introduction of the firm's first Irish e-commerce site this week.
EBay.ie, which launched with a celebrity bungee jump over the Liffey for charity, is hoping that its mix of online auctions and sales directories of second-hand and new goods will make a splash with Irish punters.
The early signs for the US internet firm, which already employs several hundred staff at its European customer support centre in Blanchardstown, are largely positive.
"We launched an Irish site primarily because our existing Irish customers asked us to," says David Jesse, managing director of eBay Ireland who is overseeing the company's push into the Republic.
"There are about 200,000 registered Irish users who buy and sell on eBay... We want to offer them a better user experience through an Irish website," says Jesse, who notes that the most popular items for sale on eBay.ie are computer equipment and electronics.
A quick scan of eBay.ie this week shows another popular category is tickets, particularly for the upcoming U2 concerts in Croke Park, which are selling at up to €300 for a pair.
PlayStation 2 games were selling for about €3 a piece while bidding on a 1991 Down hurling jersey was at €5.
EBay's huge global market of 147 million users makes it an attractive and efficient way to match buyers and sellers for a range of goods. It has 50,000 separate categories of goods for sale, everything from rare collectable items to household junk that at first glance does not seem to have any real value for buyers.
Explaining some of the more bizarre items that are traded on the website - last week a jar of Brad Pitt's breath was listed on the site - Jesse highlights the fun of trading on eBay.
"The excitement of seeing things bought at the last minute and finding rare items listed on eBay attracts people," he says.
He says $1,000 (€831) of deals are struck every second on eBay websites, helping the firm to generate revenue worth $1.03 billion in the first quarter of 2005 - not bad for a firm that neither owns the goods that it advertises nor delivers them to its users.
People that use eBay to sell items pay fees to the company for both listing and auctioning via its websites. The cost of postage and packaging can either be paid by the seller or a buyer.
"Ebay acts to democratise trading for people with goods to sell... It enables them to buy and sell goods in a way that they have never been able to before," says Philipp Justus, senior vice-president and general manager eBay Europe. "We level the playing field for people regardless of whether they are large or small."
To sell on eBay's websites a person requires only a computer, a digital camera and an internet connection. This has attracted millions of small-time sellers, who swamp the site with household bric-a-brac.
The vast reach of the website has attracted corporate sellers onto eBay and also encouraged a new generation of entrepreneurs to set up solely using eBay's network of sites to reach customers.
Two Irish-based firms, Luzerntech and Justdeals, are using eBay.ie to sell their products via the web. And eBay is hoping that more will be attracted onto the platform with the introduction of the Irish website.
Justus, who was previously head of eBay Germany, says that it is likely that entrepreneurs or existing retailers will begin to set up eBay drop-off centres where consumers can leave goods to be advertised on the website. Deutsche Post has already set up more than 100 of these drop-off centres for goods in Berlin while the success of eBay led to the creation of store chains right across the US.
EBay is hoping that similar operations will establish themselves in the Republic, thereby boosting its trading volumes and helping it to grow its profits. And the launch of eBay.ie could not have come quickly enough for the firm's investors, who have seen a 40 per cent fall in eBay's shares since the start of the year on fears that it is now a mature business.
In a series of notes to investors, analysts have warned that the firm, which is 10 years old this year, is finding it difficult to maintain its rapid growth overseas in order to compensate for slower growth in its core US market. They also warn that new competitors such as Yahoo, which last week said it would cut out auction fees for its users, could begin to eat into eBay's profits.
"We have competed with companies for years, some of which haven't charged fees," says Justus. "We are not very concerned about Yahoo but, of course, we look at what they do."
But management at eBay is well aware of the need for it to maintain its growth rates to attract investors and has begun to diversify its business. Earlier this month, the firm said it planned to acquire the price-comparison company Shopping.com for $620 million, an acquisition based on the concept of bringing buyers and sellers together.
"We saw some of our sellers advertising on the shopping.com website and thought we could offer our customers these services... It was really a case of eBay following our community of buyers and sellers," says Justus.
EBay is also looking towards expansion in China for growth and continued expansion of its online payments firm PayPal to boost its earnings in the future.
"We entered the Chinese market two years ago and there are clearly hundreds of millions of potential users throughout the Asian market... In the European market, the question is how can we deepen our relationship with customers," says Justus, who notes that e-commerce still only accounts for a tiny fraction of overall trade and is sure to rise.
In the Irish market, eBay will face competition from domestic competitors for customers and the fees that they pay. For example, the online arm of the magazine Buy and Sell and eBid, an Irish-owned and operated copycat rival of eBay, already offer similar services.
So what will be the impact of eBay's launch in the Republic?
"I don't think it will have a big impact on our business," said Rachael Brannigan, buyandsell.ie's spokeswoman. "We offer advertising on our website but users have to make direct contact to make sales... but we will be making changes to our website operations shortly and introducing new features."
EBid.ie, the small Irish company that faces the biggest threat from eBay, did not return calls or comment for this article. But given the similarity of its business model, it is likely eBay will be targeting its customers.
The battle for the Irish online shopper and auction goer is only just beginning.
Irish online auctioneers
eBid.ie - The company was founded in 1999 by Claire Cronin in the dotcom craze and copied many of the techniques that eBay had already used in the US.
Its latest results show a profit of €7,974 in the year to the end of December 2004 but since its launch it has amassed accumulated losses of €2.24 million.
EBid made revenue of €23,934 in 2004.
Buyandsell.ie - The advertising magazine, which is owned by Associated Newspapers, launched its online arm in 1999.
The website provides advertising listings for a range of goods along with contact details to enable purchasers to make their own contact with the sellers.
The company said this week it would launch an updated website over the next six to nine months.
eBay - The world's biggest auction house was founded in 1995 by Pierre Omidyar and quickly established itself as one of the biggest global e-commerce brands.
The firm generated $1.03 billion in sales in the first quarter of 2005 and has 147 million registered users in 33 international markets. This week it launched its first Irish-specific website. It already has 200,000 registered users from the Republic.
