E-commerce giants position for changing marketplace

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E-commerce giants position for changing marketplace
E-commerce giants position for changing marketplace

EBay's $2.4 billion acquisition of 
e-commerce services company GSI Commerce will give the online sales company a large-merchant client base to rival industry leader Amazon.com. However, experts have mixed opinions regarding whether eBay will be able to truly challenge Amazon, noting that Amazon also has its sights set on entering new markets. 


Although eBay has not explicitly said it is buying GSI to take on Amazon.com, the deal is a "blatantly transparent" move against its rival, said Marc Appana, VP and senior 
consultant at e-commerce consulting company FitForCommerce. He noted that companies such as Macy's have left Amazon.com's platform, giving eBay an edge with 
large retailers. 


"The GSI Commerce acquisition gives eBay the enterprise model that Amazon can't even match," said Appana. "I think in that one way they've leapfrogged Amazon."


EBay CEO John Donahoe said during a conference call announcing the GSI acquisition that the deal will effectively position the company as a partner for large merchants. "Our two platforms can come together and form an unmatched commerce services stack for retailers of all sizes," he said. 


EBay's acquisition of GSI gains the company clients including Timberland and *Bath & Body Works, which could help it improve a reputation that had been tainted in recent years by the presence of counterfeit products on its site. 


However, Brian Walker, principal analyst at Forrester Research, said the deal will not effectively fix that consumer perception problem. "Today, the Amazon consumer experience is perceived by the consumer as better, and Amazon has become in many cases a default place for consumers to search for products," said Walker. "That's going to be a difficult challenge for eBay to overcome."


San Jose, Calif.-based eBay referred requests for comment to the conference call. Direct Marketing News contacted more than 20 retailers and merchants, but all declined to comment for this article. 


Amazon may also be looking past eBay's moves as it enters new markets, such as digital content, while eBay plays catch-up, said industry experts. The recent launches of the Appstore for Android, Cloud Drive and Cloud Player products position the company long term as a digital content powerhouse. Those launches signal that Amazon sees itself competing against Apple and Google, in terms of digital content and mobile shopping, as much as other e-commerce companies. 


Aaron Rubenson, category leader for the Amazon Appstore for Android, said the online retailer doesn't comment on other companies, but it is focusing on mobile shopping and other on-the-go product development. 


"We take mobile shopping very seriously, and across the company, we are working hard to make great products and services available on mobile devices," he said. "Our customers have told us that the sheer number of apps available can make it hard to find apps that are relevant to them. We've spent years developing innovative features that help customers develop relevant products."

CORRECTION: An earlier version of this article stated that the acquisition provided eBay access to GSI clients and named Victoria's Secret as one of them. GSI works with Bath & Body Works, a sister company of Victoria's Secret at Limited Brands. We regret the error.

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