Now Ebay is hurt by Slow US economy

Ebay announced to simplify thier operation to become more nimble. Ebay has announced to cut jobs by 10% which is about 1000 employee reductions.

The ongoing Credit crisis and Wall St turmoil is affecting businesses in the main st. Silicon Valley was so far not affected by this but a slowing economy gets everyone down. Investors are concerned that the US housing lump, rising commodity and fuel costs and credit crunch have  started affecting the already slowing business of Ebay. Ebay is all set to keep its cost structure in control and offer value deals for the holiday season quarter to attract more of the traditional shopping time in the US.

Post bailout package, the market is still under panic and has not seen any move in the positive direction. So it will be clear in a few days, how the markets will play out and easing of credit through the banking system is felt.

Ecommerce in India

Ecommerce in India is a much talked about topic nowadays. As the world looks into the growth story of India and its huge consumption opportunity, India is building the basic infrastructure required for supporting a huge population. Organised retail has just begun to happen and one sees a lot of Malls and different formats of Retail stores and chains offering variety of products.

Natural extention to this is Ecommerce, buying and selling. The internet penetration is slower than the mobile phone penetration, but the behaviour is going through a cultural and mindset change from buyer’s perspective. Some of the areas where buying on the Internet is quite evident is travel sector ie air, train, bus ticketing. Shopping engines have just started offering Price comparison features but they are surely in an early stage of this market development. There are lots of business model to catch up in various categories of products to be sold.

But there are certain areas to be addressed in ecommerce business :

1. logistics - Shipping has to be efficient and priced on transaction volumes.

2. Whole Sale - Drop Shipping business models have to be established

3. Returns - Return policies have to be very customer friendly

4. Payment Gateways - Price of these transactions have to be minimum and PayPal and Checkout type of models have to be adopted

5. Marketing - Affiliate marketing and various other Online marketing methods to be adopted

Once the above areas gets addressed,  one could see a big Industry emerging here. The likes of Ebay, Amazon, 1800flowers, petmeds, etc will eventually be taking shape in India as well.