South Africa remains a "long-term strategic play" for eBay, which owns online classifieds service, Gumtree South Africa.
This is according to eBay Classifieds Group's business unit GM, Ariel Meyer, who told ITWeb in an interview that eBay expects accelerated growth to come out of the local market.
"I feel extremely positive about the future of the business in SA. We have excellent economic conditions that foster the development of local commerce and this is an amazing set-up for us to start seeing more and more growth out of classifieds," Meyer says.
eBay's classifieds division is headquartered in Amsterdam and manages a portfolio of more than 10 brands with a presence in over 20 countries. Gumtree, which launched in the UK in 2000, was bought by eBay in 2005 and then launched in SA.
"South Africa is a long-term strategic play for us; it's been an unbelievable journey so far and a market that is really growing. We are helping build the next generation of commerce for the country through classifieds so as you do that you have to stay committed to a long-term plan because these are not things that you build overnight.
"The more long-term visibility you have, the higher the chances are that you will build something successful and which is valuable to our users in the country," Meyer adds.
Gumtree says there are close to a million items live on the site at any given moment and that on average there is an item sold every 20 seconds on the platform.
Local Gumtree director-GM Johan Nel told ITWeb the current difficult economic conditions in SA are actually an opportunity for Gumtree.
"For a classifieds player like Gumtree, in a tough economic environment this is where the real power of peer-to-peer trade comes in. New car sales have been in decline for the last couple of years and if you add the pressure of slow economic growth, it will add even more pressure to this. So you see a huge surge in second-hand car sales and we are obviously in the middle of that," Nel explains.
Meyer says Gumtree remains committed to staying the leading horizontal classifieds platform in SA and wants to further expand its presence. The short-term strategy is also to boost and develop its vertical markets, like its popular auto sales section.
"When you look at SA, it drives a very relevant share of the overall growth of the global classifieds operation. We may be in absolute terms smaller than some of the more mature markets, but SA does certainly contribute an above average ratio to the overall growth of the division."
Future of e-commerce
The online classified gets close to six million unique visitors on the site each month and the "vast majority" of these are now mobile users. Meyer says as smartphone adoption grows, it will create even better conditions for e-commerce to grow.
"There is certainly a lot going in our favour when it comes to some of the macro-economic conditions and changing consumer behaviours that is going to help everyone who is involved in the e-commerce space. E-commerce has massive amounts of growth that can still benefit everyone involved, so we do expect to see continued growth and even accelerated growth coming out of SA - as we do from other developing markets where we have a presence," says Meyer.
eBay operates in a number of emerging markets and Meyer says the essence of that definition implies these are primarily growth markets. Gumtree SA falls into that category, even though it has already been around for over 10 years locally.
"Specifically what sets SA apart from some of the other markets where we also invest for growth, is that in SA we have two businesses that co-exist: a very mature horizontal classifieds business as well as a lot of growth coming from verticals, like the auto sales division.
"We are currently the biggest autos marketplace in SA - between 1.4 million and 1.9 million South Africans look for a car on Gumtree every single month," the group says.
Acquisition strategy
"When it comes to SA, we will always stay true to our DNA, which is that we grow businesses organically but we would never walk away from an opportunity of an acquisition if we think that it makes strategic sense," according to Meyer.
He says for now, eBay is not looking to expand to other African territories because it still sees a lot of growth potential out of Gumtree South Africa; however, the idea is not off the table.
"We would never discard any opportunities for expansion across the African continent, but at the same time we know there is so much more growth that can come out of SA. So we are always torn between whether we should be expanding into more geographies or sharpening our focus on SA.
"But the truth is all options are open. However, we know there is still so much more that can come out of SA, so we do retain a large part of our focus on running a very effective operation in this country," he concludes.
Share