Last month, Australia’s competition and consumer watchdog, the ACCC, announced it was launching an inquiry into online marketplaces such as eBay, Amazon, Catch and Kogan, including their pricing practices, how they use seller data to launch competing product lines, how they handle consumer complaints (or not) and the ability of customers to leave and read reviews of sellers and products. We asked five e-commerce experts to weigh in on some of these issues, including Paul Greenberg, an ea
early adopter of selling on eBay in Australia and now the chair of online marketplace MyDeal; Phil Leahy, another former eBay seller and the founder of PPE marketplace, MedCart; Tim Davies, president of the Professional eBay Sellers Association in Australia; Merline McGregor, general manager of ANZ at Pattern, which helps brands sell on marketplaces; and Richard Umbers, the former CEO of Myer, who oversaw the retailer’s launch of an online marketplace.
Here’s what they had to say:
On marketplaces using seller data to compete
“It’s a problem. Ebay has always held their ground that they’re only a marketplace and they’re never going to get into the product buying side, whereas Amazon has not done that. Currently about 75-80 per cent of [Amazon’s] products are in the marketplace, but they are the principal seller for the remaining 25-20 per cent. And it is a known fact that they look for those high volume lines and go out and source them, so I think the commission will have a look at that.” – Paul Greenberg
“I do know of brands that do not want to sell directly to Amazon due to some of the concerns raised in the inquiry, and come to us to buy their product range instead due to our brand-focused approach to growth and revenue acceleration.” – Merline McGregor
“When we launched MedCart, we made it very clear that we’re not going to compete with our sellers in any way, shape, or form. Our job is to get them sales, and provide a seamless customer experience for our customers, but we’ll never enter into that arena of competing. It’s very tempting sometimes to do that, but we’ve started off with that as our vision and we will be keeping that into the future.” – Phil Leahy
“Most people accept that if you’re [opening a florist shop] on a strip, and there’s a couple of other florists down there, competition is expected. But if you go into a shopping centre like Westfield to sell menswear, and suddenly you find that Westfield has opened up a menswear shop right next door to you, it can be a little bit of a slap in the face. That’s an issue which is particular to retailers that are also marketplaces. It will be useful having an inquiry to flesh out the feedback from the seller community here in Australia.” – Tim Davies
On who handles consumer complaints
“As a buyer, if a product doesn’t fit, or it’s poorly made, or it’s not as described, that is covered by the law, but a big area of friction is when the seller is overseas [and doesn’t provide adequate support]. It’s hard to pick up the phone and talk to a person. Many marketplaces [don’t offer customer support] because of the sheer volume of transactions and people that they’re dealing with. I don’t know that there’s necessarily a good solution to that, but I think there’s been enough instances of that happening, and I hope that buyers who are experiencing those things actually are reporting them.” – Tim Davies
“You can’t walk into a Westfield management office and say, I’m very unhappy with the item I bought from one of your shops. They’ll say, go back to the shop.” – Paul Greenberg
On the level of competition between marketplaces
“One thing that we won’t be mentioning [in our submission to the ACCC] is fees. Before there were other marketplaces, eBay was the bad guy because they were charging money for people to use their website and get customers. Now there are other marketplaces out there, and most of them are actually more expensive than eBay, so that is not an issue we see very often now.” – Tim Davies
“I used to sell on eBay in the ’90s and I would have loved another marketplace. There weren’t any. Now there are heaps.” – Paul Greenberg
On retailers launching their own marketplaces
“The industry trends in online over the last 20 years have been to an increasingly integrated ecosystem, across both digital and physical channels. In the first step – online became multichannel, then as the back end infrastructure became increasingly integrated, a more efficient omnichannel model evolved. The further evolution to a marketplace through the addition of multiple vendors allows the retailer to extend the product offer, creating extra value often without any requirement to hold additional stock. As a further enhancement, some marketplaces extend the range of goods and services on offer, both for customers and online sellers, creating a marketplace ecosystem and an even more compelling retail offer. Marketplaces are here to stay.” – Richard Umbers