Now a days E-shopping is measured to be most efficient way of purchasing items over the internet. It allows the consumers to appreciate a vast diversity of products from various stores which includes variety of products. E-Shopping also delivers consumers with high level customer service.( Georgina Abboud, 2014)
(Angie,12th Sept 2014)
There are many such marketplaces available on internet. And Amazon from Washington and eBay from California, USA are two segment leaders. According to format, payment methods, buyer seller relationship, reviews, returns, demographics, taxes we can differentiate these marketplaces and how they affect the costumers and vice versa how consumer behaviour affect enterprises.( eBridge Marketing, 2015)
By the end of this blog we all will understand how these factors played important role in the competition of these two giants and finally making amazon the champion.
Consumer behaviour is an analysis of people’s decision of what they buy or need from the products or services. It is necessary to learn consumer behaviour to understand how potential consumers will react to a new service or product. And also it helps organisation to recognise future opportunities.( Tara Schofield, 2014)
There are 3 main factors of consumer behaviour:
- Psychological Factors like customer’s perceptions and attitudes
- Personal Factors like gender, age, culture, background and other personal issues.
- Social Factors like income, living conditions, and education level.
Consumer response to Amazon and eBay: (eBridge Marketing, 2015)
- Concept: Amazon is best market for practically selling anything. With fixed price buyers can review and buy products. Mostly new products are up for sell. eBay’s business model is auction model. Seller will place product on auction and maximum bid from the top customer will win the auction. Generally used for used items or collectables.
- Payment method: Unlike eBay, Amazon doesn’t want upfront payment on listed products. In eBay a seller have to pay to list the product irrespective if they sell or not. This attracts sellers towards amazon and simultaneously it attracts consumers towards more variety of products.
- Buyer and seller relationship: Amazon acts as a middle man in every transaction that consumer makes. It leads to high level of customer service. Whereas in case of eBay customer interacts directly with the seller hence eBay can’t provide guarantee of quality of service. Consumers want best service for their money so it is obviously help amazon grow.
- Returns: Consumers wants assurance in every truncation they make. Assurance that their money wont be wasted on damaged goods. Amazon plays important role in being middleman in each transaction they give 90 days replace or refund guarantee. Unlike eBay, where the return policy is completely dependent on seller.
- Taxes: Consumers want fixed price for the products exclusive of hidden taxes. Amazon decides whether to add excessive tax or not. While in ebay sellers decides whether to add taxes on listed product or not. In this way Amazon can control the price of the products with ease.
- Demographics: Considering all the factors and according consumer behaviour amazon have over 240 million consumers in 10 different countries. Includes the age group of 20 to 40. At the same time eBay have 150 million active customers over 25 countries with the age group of 35 to 49. In 2014 Amazon’s sale was $88 billion dollars leading to the eBay’s sale which was $17 billion dollars.
After examining all the factors influencing consumer behaviour, we can say that Amazon have upper hand in almost each section over eBay. This we can notice in the total revenue statistic in the below chart. Now a days consumers want their convenience, assurance of good quality products, reliability, value for money and good customer service and that is well reflected in the growth of Amazon and decline of eBay. (Rachel Gomez, 2014)
Name: Anuj Shashikant Bhogle
Student ID: 215232377
(Georgina Abboud, 2014) http://guardianlv.com/2014/04/online-shopping-and-its-importance/
(eBridge Marketing, 2015) http://www.ebridgeconnections.com/blog/our-un-biased-comparison-of-amazon-and-ebay/
(Angie,12th Sept 2014) http://earnrentmoneyonline.com/online-selling-ebay-vs-amazon
(Rachel Gomez,2014) http://www.slideshare.net/RachGomez95/ebay-31468580