The Evolution of eBay: From Laser Pointers To Luxury Watches
eBay Founder Pierre Omidyar started the site as a hobby. And as legend has it, when eBay (known initially as AuctionWeb) was founded in 1995, the first item sold on the site was a broken laser pointer. When an astonished Omidyar asked the auction winner why he would pay $14.38 for it, he matter-of-factly replied, "I'm a collector of broken laser pointers." Perhaps that story is apocryphal, but now, nearly three decades since its founding, eBay has gone on to sell everything from (functional) laser pointers to luxury megayachts.
Today, eBay is undergoing an evolution that in watch parlance feels more like a revolution. As a user of the site since 1998, I can attest to the changes afoot. Gone are the days of sending your money and praying that the item you bought would come in one piece and as described. That uncertainty has been replaced by eBay’s Authenticity Guarantee, a no-cost service available on timepieces over $2,000, which ensures the sold watch is 100% as described and authentic.
To understand how we arrived at this new normal for luxury watches on eBay, I spoke with three eBay executives. From a 20+ year veteran of the company to their new GM of Luxury, eBay opened its proverbial doors so Watchonista could get the whole story.
How Did We Get Here?
eBay’s watches category first came online in the late nineties. Other than watch forums, eBay was the only place to buy and sell watches online at the time. Long before brands and retailers embraced e-commerce, eBay was there. So I asked about the unique value proposition of eBay in the late nineties.
Tirath Kamdar, eBay’s GM of Luxury, explained, “At the time, there was not a single platform out there that did a great job peer-to-peer, giving access to sellers and buyers, and, at the same time, leveraging things like reviews. But back then, people were dependent on transacting with each other and leveraging the feedback ratings that they were getting.”
Over the past two decades, since it began offering watches as a category, eBay has achieved success and sold countless watches due to its vast assortment of brands, accessories, and all the ephemera that goes along with them. In fact, in 2020 alone, eBay sold more than 200,000 luxury watches.
Of course, we'd be remiss not to talk about some of the perceptions people have about buying and selling watches on eBay. It was a place where sellers could offer pieces often unchecked, and buyers would bear the brunt of any fallout if the purchase went wrong.
But in the past 18 months, eBay has rolled out a new strategy for its luxury watch offerings that was years in the making. As James Hendy, eBay’s GM of Authentication, described the scope of the challenge: “We asked ourselves, what is going to change that perception? What's going to add trust in these core categories? You need that foundation of trust, and then you can go into all of the cool and amazing things that eBay is doing, like creating better content and experiences for buyers.”
Outside of all the marketing hyperbole, it is clear that eBay’s Authenticity Guarantee is aiding in significant growth in the watches category. I spoke about it with Suzanne Smith, a Program Manager on eBay’s Consumer Team who oversees the authentication program. The 20-year veteran of eBay added, “We've come a long way. But we’ve been looking at authenticity for probably about four or five years now. What we're doing now is finally getting everyone on the bandwagon, building trust and confidence for buyers and sellers. And with the addition of escrow payment, we're expanding the payment options available to luxury watch enthusiasts to foster an even more seamless experience.”
The question on everyone’s mind is, where does eBay go from here? Being a renowned Silicon Valley darling for over two decades gives the brand plenty of opportunities. According to a recent study, luxury watches account for just 1% of the overall luxury market. So imagine if a company with the resources and talent of eBay can take that number to 2%. That would be a good thing for the industry.
As Kamdar told me, “I think eBay is becoming a destination to reach the next generation of digital consumers. And I think the big thing now is how we could be a partner, not a competitor, to brands and retailers? The world shops from anywhere right now. So, eBay could be a good place to go and build your brand. With 187 million active buyers on eBay, we have brand loyalty. eBay has always been a place where businesses could build their name and find success."
Kamdar continued, adding, “Our vision is to become a place where you never question authenticity. We are trying to make eBay more of a player in the second-hand luxury market. The vision is to build more of that luxury perception. We're also investing heavily into experience and marketing. One thing is to make sure we're delivering what we promised to the customer. And I think over time, people will see eBay as more of a luxury destination than just a place for watches.”
There is no reason to believe the vision Kamdar described cannot be realized. eBay has come a long way since its founding in 1995. It survived the dot-com bubble and the Great Recession. And today, eBay is doubling down on luxury watches, which as a category has experienced reduced exports over the last year due to COVID-19 but has seen a surge in secondary market demand due to increased disposable income.
James Hendy explained, “The thing is, eBay is changing, and people are noticing. That’s the feedback we get from buyers and sellers. We had a 25-year head start on being a global brand. We know what's going on in the retail market and how luxury brands are trying to diversify. My line is always, ‘You can spend plenty of time doing that, or you could just come over and talk with eBay, rather than just dipping your toes in.’ We know how to do it well, and we know how to do it better than we've ever done.”