Archive for the ‘boycott’ Category
EBay Boycott Fails, Profits Soar
Posted on: May 12, 2008
eBay has the last laugh at its sellers expense, throws a bit of sand in boycotters faces with earnings report
Apparently, eBay’s policy changes are having desirable effects, despite the massive public outcry the company received. While the company cut its listing fees, it more than made up for it by significantly raising its commissions on successful sales, particularly on low-priced items such as video games and CDs. The higher rates along with the elimination of negative seller feedback to the buyer created outcry among many loyal eBay sellers.
Some sellers tried to boycott eBay. Initial metrics seemed to show the boycott to be working — listings were decreasing and sales were down, by most official counts, although eBay insisted they weren’t.
However eBay soon rebounded and resumed largely business as usual, despite having lost a few loyal sellers. As DailyTech‘s Shane McGlaun wrote in a blog, sellers really had few choices — Amazon.com only allows resale of select items such as CDs or books, and Craigslist.com is avoided by many, due to its unseemly reputation as a hotbed for illegal activity. Most sellers were stuck with eBay, whether they loved it or hated it.
On Wednesday, eBay CEO John Donahoe announced a stronger than expected earnings report, with the company reporting $2.19B USD in revenue, a 24 percent increase over Q1 2007. The performance significantly beat analyst expectations. Net income also rose 22 percent to $562M USD.
Despite the boycott, listings jumped 10 percent to 647.4 million, which eBay attributes to the listing fee cuts. However, eBay did admit that its “conversion rate”, the percentage of sales ending in success, “declined only slightly”, though eBay would not reveal exact figures. The total “gross merchandise volume”, a metric measuring the value of goods sold on eBay and associated properties, experienced 10 percent growth to $16M USD
However, while eBay may have a bit of grounds to gloat over the boycotting sellers, the long-term outlook for the company is not quite as peachy. In 2008’s first quarter, eBay had 83.9 million active users, up just over one percent from last year, at 82.9 million users. The stagnant growth indicates that eBay may be reaching the market saturation point.
For a company at a market saturation point, customer satisfaction becomes increasingly important. EBay CFO Bob Swan noted, “We’ve concluded that the best way to grow our active user base is by not losing any of them.”
However, while Donahoe may not want to lose his users, his company’s policy certainly threatens to send some users packing, or at least slow growth further. Next month, the company will eliminate negative feedback from sellers to buyers, taking away a major tool which sellers could use to safeguard themselves against malicious customers. While Power Sellers will have some new protections, normal sellers will find themselves in a much more dangerous situation, at the mercy of their buyer’s reviews.
- In: Beijing | boycott | china | EU | Geneva | Nicolas Sarkozy | Olympics | opening | Tibet
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Nicolas Sarkozy, the President of France, has led a chorus of European criticism over China’s actions in Tibet, refusing to rule out a boycott of the Olympic Games opening ceremony.
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Tibet groups abroad say a protester was shot dead when police responded by ‘firing indiscriminately’
“I don’t close the door to any option. I want dialogue to begin and I will graduate my response according to the response given by Chinese authorities,” Mr Sarkozy said.
Until yesterday, Western governments had been measured in their response to two weeks of unrest in Tibet, mostly rejecting any possibility of an Olympics boycott.
But days of strident attacks on the Dalai Lama, the Tibetan spiritual leader, by Beijing; an uncompromising security response inside Tibet, and the publicity gained by anti-China protesters abroad have generated a fiercer response.
Britain also criticised Beijing, with an annual report by the Foreign Office highlighting Beijing’s “violation” of human rights in Tibet. David Miliband, the Foreign Secretary, said worldwide concern about the situation in Tibet was “justified and proper”.
“There needs to be mutual respect between all communities and sustained dialogue between the Dalai Lama and the Chinese authorities,” he said.
In its first collective statement, the European Union demanded that China stop using force against peaceful protesters, while also calling on demonstrators to “desist from violence”.
“The EU stresses the importance it attaches to the right of freedom of expression and peaceful protest,” it said at the United Nations in Geneva.
Germany also urged dialogue between China and the Dalai Lama. A spokesman said Chancellor Angela Merkel was prepared “at any time” to repeat her meeting last year with the Dalai Lama, which plunged relations between Beijing and Berlin into an unexpected freeze.
At the weekend, the Chinese government accused the Dalai Lama of being behind rioting in Lhasa, which left 19 dead, and of conspiring with Muslim terrorists to sabotage the Olympic Games.
A government spokesman said a protest by free speech campaigners at the lighting of the Olympic torch in Greece was “shameful and unpopular”.
The spokesman added: “We also believe that competent authorities in countries through which the torch relay will pass have the obligation to ensure a smooth relay.”
This suggests that China expects host countries, including Britain, to react vigorously to prevent protests.
Today, in a public relations fightback, Beijing will take a small, carefully selected group of foreign journalists to Lhasa to present its side of the story.
The government confirmed that a policeman was killed by rioters in a Tibetan area of Sichuan province on Monday.
Tibet groups abroad say a protester was shot dead when police responded by “firing indiscriminately”.
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