eBay’s Q4 Sales Slump

Online retail giant eBay said fourth-quarter sales in 2008 experience more than 6 percent decline amidst global economic recession which forced consumers to spend less in virtually all products.

With this gloomy sales report, the company said that this is the first-ever quarterly revenue decline it has experienced.

Online retail giant eBay said its fourth-quarter sales experienced more than 6 percent decline amidst low consumer spending and weak dollar which reduced the value of overseas sales.

In a statement, eBay Chief Executive John Donahoe expressed his “frustration” over the sales decline.

During the holiday season, the online retailer has experienced lower sales compared to previous years. This result was due to the ongoing economic recession which forced consumers to spend less on virtually all products.

After succeeding former CEO Meg Whitman in March 2008, Donahoe changed its marketing strategy by focusing more on selling products with fixed-price instead of doing auctions as the latter is becoming less popular among consumers.

According to eBay’s report released on Tuesday, almost half of the online transaction accounted for fixed-price sales.

The report also revealed that eBay’s revenue has experienced double-digit decline, slumping by 16 percent to $1.3 billion, following a 12 percent decline in online transaction.

Meanwhile, some analysts believe that eBay’s slumping sales is due to complex categorization of items which makes it hard for consumers to find products they want to buy.

Unlike eBay’s declining revenue, Amazon.com reported its impressive sales during the holiday season, acquiring more than 3 million transactions during the period.


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