EBay chief executive John Donahoe has told investors that the online shopping and auctions giant is benefiting from strong e-commerce activity in Europe even as the continent continues to suffer its worst economic crisis in recent years.
Speaking at the annual Sanford C. Bernstein Strategic Decisions wealth management conference in New York, Donahoe said that e-commerce growth rates have held up “stunningly” in Europe.
“I don’t have a crystal ball on the macro-economic picture in Europe any more than anyone else does,” Donahoe said when asked about how Europe’s macro-economic woes are likely to affect eBay going forward. “What I will observe is that over the last 12 to 24 months, e-commerce growth rates have held up in Europe – stunningly, frankly.”
He added that as European macro-economic and retail statistics have been highly volatile and trending down in the U.K., Germany and Italy, e-commerce growth rates have been in double digits in percentage terms
Donahoe speculated that part of the reason for the robust growth may be that consumers have been looking for better deals online to make their euros stretch further. He noted that roughly half of all shoppers now check prices and other factors online “at some stage” before making their final decision to buy. “The line between e-commerce and retail has become blurred,” he said.
Donahoe also told investors that another eBay company, PayPal, the online payment arm of the marketplace, is continuing to grow significantly in Europe.
“One of the reasons we have such a strong business in PayPal in Europe is that even inside the eurozone, cross-border transactions are complicated because the banking systems differ so much [from country to country]. Frankly, card usage also differs significantly across Europe,” he said.
The seamlessness that PayPal can provide in cross-border transactions is an opportunity that balances some of the macro-economic risks, he added,
At the same time as suggesting that PayPal has a bright future, he noted that mobile is having a profound impact on consumer’s habits, with more change occurring in the past three years than there has been in the past 20.
Donahoe’s comments come as a new study shows that Europe has now become the largest e-commerce market in the world, overtaking North America for the first time.
Europe had recorded 19% growth in 2011 and is now worth an estimated $307 billion, surpassing North America on $297 billion, according to a report by the European Multi-channel and Online Trade Association.
“Online retail sales now account for around 5.1% of the total value of the retail market in Europe, with 240 million e-shoppers spending an average of 1,000 euros (US $1,244) each,” the association said.
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