The Woodstock of e-commerce officially opened here yesterday. Meg Whitman, chief executive of e-Bay, inaugurated her company’s 10th anniversary celebrations, with a speech at an evening packed with fun, frolic and festoons. “There are 11,600 registered participants here,” Whitman said, “representing over 60 countries and all 50 American states.” E-Bay’s 147 million users, she added, made it the “seventh-largest country in the world”. Statistics and revelry aside, the anniversary marked a milestone in the evolution of the Internet economy; e-Bay is one the few big survivors of the Great Dotcom Meltdown. Indeed, its users — spread over 33 countries or markets, e-Bay India having joined the list in March 2005 — will do business worth $40 billion this year. What began as a Silicon Valley fad a decade ago, an auction site at which to buy and sell collectibles — stamps, coins, old photographs, books, autographs — has grown into a genuine New Economy marketplace. Speaking the The Indian Express, Avnish Bajaj — who left Goldman Sachs in 1998 to set up Bazee.com before eventually selling out to e-Bay and becoming its India CEO — said, “E-Bay has a model that works only on the Net — bringing people across markets, across borders to buy and sell directly to each other. Every other successful dotcom does business that can be replicated in the real world; not e-Bay.” The argument is valid to a degree. Amazon.com sells books but so does the neighbourhood bookstore; you can order Nirula’s ice-cream online, but also visit a Nirula’s outlet. e-Bay remains a singularity. While the e-Bay success story is a bit of a folk legend in middle America, the company itself is looking to China and India as the future. Existing auction/market websites in both countries were acquired in the past year as part of Whitman’s push into Asia. Unlike the collectibles that began the e-Bay boom in the US, the China and India sites are driven by established brands. “The market is different,” said Bajaj, “mobile phones are the number one selling items in China and India. If you’re a person in a small town in India looking for a top-end cellphone, you may have only one dealer to go to. If you get onto e-Bay, you have access to many more dealers.” Among the five hot sellers on ebay.co.in is jewellery, particularly diamonds. Also beginning to make a mark are apparel sellers from Tirupur, indicating what a leveller the Internet can be for small town businesses. In America itself, e-Bay has emerged as a consortium of small businesses — antique dealers, specialised linen, second-hand cars — a category that e-Bay India hopes to capitalise on as well and “30 per cent” of all deals, Whitman said, are now at a fixed price rather than after an auction-style bid. A business sector has truly arrived, it is said, when the tax man begins to notice it. e-Bay India gets a commission on each deal it facilitates, and has to pay a 12.5 per cent service tax on it. In the US, the big issue confronting e-Bay is sales tax, collected by the individual state. It was the subject of animated discussion between company officials and representatives of the e-Bay community yesterday. Whatever the result, e-Bay can draw consolation that its growth has forced governments to consider changes in the law and in the tax regime. Ten years after going online, that’s some achievement. (The writer travelled to San Jose at the invitation of e-Bay)
