eBay making it in Asia?

As reported last week, the company established its Singapore Web site last week. eBay also has a presence in Australia, Japan, Korea and New Zealand.

"Singapore is a relatively small but highly-developed market with an Internet-savvy population, and an adequate level of ecommerce," eBay senior vice president Matthew Bannick said in an interview.

"eBay's global community already includes thousands of users in Singapore," he noted. So when the Singapore site was developed "to better serve their trading needs, as well as to make eBay more accessible and relevant to new users in Singapore."

Besides, adds Bannick, the cost of setting up the Singapore site was modest "because it's hosted in the US and we use the same engine used for other English language eBay sites."

He revealed that the company also plans to extend its reach into Taiwan and/or China. However, he declined to reveal when or how these plans will be executed.

"China and Taiwan are rapidly-growing markets with huge potential, and we are an established name with the right kind of formula for success.

"We understand that the Asian markets value brand more than the American and the Europeans, and we'll ramp our marketing efforts based on these factors," he added.

From a revenue standpoint, other online companies such as Similan.com and InterAuct have found the going tough...even during the Internet boom. But Bannick stood firm on the company's decision to expand outside the US.

He declined to reveal current revenues from Asia but noted that eBay expects "US$3 billion in revenues by 2005, and one third of that will come from Asia."

But analysts say....
However, analysts do not share the same optimism as eBay.

"At present, it's difficult to do anything in Asia, let alone survive," said Matthew McGarvey, IDC Asia Pacific Internet Research senior analyst.

McGarvey cited Lycos as an example of a late-comer into Asia, which ran into trouble. Coupled with the current economic situation, "it doesn't look good for eBay to expand into Asia." He said eBay should concentrate its efforts on geographical areas where it has been generating revenue.

About 85 percent of eBay's revenues for the last three quarters were generated within the US, while the rest from Europe, Asia and Latin America--lumped collectively as the rest of the world.

In its third fiscal quarter ended September, eBay generated US$194.4 million in sales worldwide--from which merely 16 percent came from outside the US.

eBay generated US$180.9 million worldwide in the second quarter, and US$154.1 million in the first quarter. The contributions from the international markets were 14 percent and 12 percent respectively.

IDC's McGarvey said that online auctions have not really taken off in Asia. "This was because of lack of demand for such a service and people who were using the auction (in Asia) were mostly expatriates," he noted.

"Nevertheless, eBay can play it safe by setting up its presence through partnership with local portals," McGarvey said. "This will help eBay market their product through a partner who knows and understands the local market better."