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Companies in this industry operate auction websites for consumer-to-consumer or business-to-consumer trade of new and used goods. Major US companies include eBay, which dominates the industry; major companies based outside the US include China's Taobao (owned by Alibaba Group) and Argentina's MercadoLibre.
eBay is the world's leading internet auctions site; business outside the US accounted for 58% of the company's net revenue in 2015. International expansion is key to the company's growth strategy. In particular, Germany, the UK, Australia, and South Korea are critical to eBay's revenues and profits. Top growth regions for the industry overall include Latin America, led by MercadoLibre, and Asia/Pacific, where Taobao has the largest share of the market. In South Africa, BidorBuy Group runs Africa's largest auction site.
The US internet auction industry includes about 400 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $6 billion. Business-to-business (B2B) auction websites are generally not included in this industry. Internet retailers are covered in a separate profile.
Demand is driven by consumers' personal income. Profitability of individual companies depends on effective marketing to build a base of buyers and sellers. Larger firms enjoy economies of scale in technology purchasing, customer service, and telecommunications. Smaller firms compete on outstanding customer service and providing niche products.
Companies in the internet auction industry compete against online retailers, especially discount retailers and inventory liquidation sites, as ...
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