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eBay Tests Local Service Deals as Part of Online Marketplace Expansion

By | 10.22.12

eBay Tests Local Service Deals as Part of Online Marketplace Expansion

eBay is currently in the process of developing and testing several new features and offerings meant to enhance and expand its iconic site. Along with a site-wide redesign that adds Facebook-like features to improve customer interface, eBay is also attempting to expand into a multibillion dollar market still led by Groupon. Currently, eBay is testing an offering called eBay Lifestyle Deals in a limited number of urban markets, including the San Francisco Bay area, Los Angeles, and Washington DC.

Here, eBay is offering local deals for service products such as yoga classes and passes to the gym. This expands on eBay’s current Daily Deal offerings on physical products, potentially opening up a whole new market sector. As their Daily Deal offers have demonstrated, eBay has already shown a commitment to local commerce, so extending this to local merchants and adding services to the mix seems like an obvious next step. Overall, discounted local services seem to be a good fit for eBay’s large marketplace, which is already associated with discount prices and value.

To coordinate the service deals being offered, eBay has teamed up with start-up Signpost, who effectively arranges the deals with local merchants and then posts the offering and details online. If the efforts in the test markets go well, eBay plans to add more deal providers in the future.

Other major companies currently experimenting with offerings that target this market include Google and Amazon (Facebook dabbled with it but shelved its first effort in the market last year). In fact, Signpost is backed by Google Ventures and already provides deals for Google Offers, another Groupon rival offering discounted local services. This reflects general expectations of growth in this sector. Local media analyst BIA/Kelsey expects consumer spending in the U.S. for online deals to reach $5.5 billion by 2016, up from $1.8 billion in 2011 (including daily deals, product deals, flash sales and other discounted online sales channels). Groupon Chief Executive Andrew Mason estimates the global local commerce market as currently being worth $3 trillion.

References

Barr, Alistair, and Wahba, Phil. “Exclusive: EBay Tests Deals on Services, Takes on Groupon” Reuters. 10/10/12.

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