In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche
Does eBay Really Have to Compete with Amazon?
Shrewd value investors will ask the above question because a strong case can be made that eBay does not really compete with Amazon. eBay sells used items through auction and discounts to a select clientele.
eBay has become a true value investment because the company has proved it can survive and perhaps thrive in the age of Amazon. One reason why eBay makes money is by not competing directly with Amazon.
Other organizations that could benefit could be Netflix, Etsy (NASDAQ: ETSY), Sears (NYSE: SHLD), Staples (NASDAQ: SPLS), Best Buy (NYSE: BB) and Walmart (NYSE: WMT). All of these retailers could get access to the $404 billion Chinese market through alliances with Alibaba and stores on Tmall. Walmart, which already has a presence in China and a working relationship with Alibaba, could be in a great position here.
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If Walmart rolls out this subscription service in a smart way, it could position itself as the anti-Amazon.
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That gave Alibaba a quarterly year to year revenue growth rate of 38.39%, over twice that of Amazon.com, which reported a revenue growth rate of 15.08% on March 31, 2015. Alibaba’s growth rate also far exceeded that of eBay Inc. (NASDAQ: EBAY), which reported a rate of 4.36% on March 31, 2015, Best Buy NYSE: BBY), which reported a revenue growth rate of 2.82% on January 31, 2015, and Staples (NASDAQ: SPLS), which reported a negative revenue growth rate of -3.69% on Jan. 31, 2015.
Read MoreJPMorgan Chase (NYSE: JPM) reported that one million of its account holders are now using Apple Pay at its Investor Day on Tuesday, February 24, 2015. That means one million customers of one of the nation’s largest banks are using an alternative to traditional banks. Bank consumer behavior is changing faster than we thought.
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Square has also tried to launch its own payments apps called Square Cash and SnapCash. Square Cash is a payments app similar to Venmo and Apple Pay; SnapCash is a variation of Square Cash reengineered to work over the popular social network Snapchat. In other words, it’s Square’s answer to Venmo. One difference is that it can work with merchants that use Square.
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