"... we hosted a conference call yesterday with Gian Fulgoni, Chairman of comScore, which underscored that a meaningful slowdown is underway in the e-commerce market. Takeaways from the call include:
- Is March growth hitting a wall?: E-Commerce growth rates (excl. travel) have slowed from 18%-23% Y/Y in 2007 to *13% in Jan. & Feb., largely mirroring off-line retail. While Mr. Fulgoni did not provide March figures, we think that March e-commerce sales could land in the single-digit growth range, particularly based on our conversations with cos. regarding March.
- Mixed results among categories: comScore indicated that several categories grew faster than overall e-commerce growth (incl. video games, tickets, furniture & electronics). Meanwhile, media, sports, clothing, jewelry & toys saw slower growth. The slowest spending occurred in the sub-$50K HH segment (+2%), with the >$100K segment growing by 26% and $50- $100K segment growing 11%.
- Visitor Share Losses at eBay: Amazon appears to be gaining visitor share, growing from 16.5% in '07 to 21.5% in '08, while eBay is shrinking from 55% to 48%, of combined visitors. Amazon also appears to attract visitors with higher HH incomes over eBay (i.e. less price sensitive).
- Comparison Shopping Pressuring Price? Consumers are now armed with more information and choice with the emergence of comparison shopping engines (CSE). With CSEs gaining more traffic from online buyers, they may be placing pressure on ASPs, due to greater pricing transparency. We think the variable of ASPs could become a more important factor during tough times.
I guess we will see which report is correct when Online Retailer earnings for Q1 are reported in the coming weeks.
The visitor gap between eBay and Amazon is narrowing, so it will be interesting to see if the many changes being made at eBay can turn this trend around.
Just my 12%