Sensis' Trading Post to take on eBay in online auctions

Stan Beer
Tuesday, 27 May 2008 06:34

IT Industry - Strategy

At a time when eBay is attempting to cement its dominant position in Australian market, Telstra's directories arm, Sensis intends to turn its Trading Post classified ads business into an online auction site. Sensis hopes the new www.tradingpost.com.au website can successfully compete with eBay and with free listings and low fees it has thrown down the gauntlet to its international rival.

Sensis, which paid $636 million for Trading Post in 2004, claims the move is part of Sensis’ strategy to capitalise on the booming online growth of Trading Post. Significantly, the announcement comes at a time when eBay Australia is caught in a midst of controversy over its attempt to enforce PayPal transactions on its user base.

With an estimated 5 million account holders, eBay Australia dominates the highly fragmented local online auctions market with an estimated 34% market share. It faces a barrage of criticism from powerful opponents including the Reserve Bank of Australia, The Australian Banking Association and rival online auction sites over its attempted PayPal move.

Describing the site as a true alternative to eBay, Sensis spokesman Steven Ronchi said that importantly the auction site will be free to list, with a free first photo - Sensis say you only pay when on an actual sale. What's more a mobile version of the site will be available to Telstra mobile users.

Trading Post will also have attractive fee structure for sellers, according to Sensis, with a capped rate of $24.95 on any item over $500, while an item under $10 will cost only 50 cents on sale.

Clearly aware of the furore eBay has created through its attempt to force buyers and sellers to exclusively use its own PayPal service, Ronchi said: "As you know Australian sellers are up in arms over [eBay's] attempt to force them to use PayPal only." He went on to say that Trading Post will provide a full range of payment options including Paymate, bank transfers, credit cards, and so on.

"We've been in discussions with a number of sellers and the response has been overwhelmingly positive", continued Ronchi.

Launching the new website and auction capability, Sensis CEO, Bruce Akhurst said the Aussie icon that Australians have loved buying and selling with for decades - the Trading Post - was entering an exciting new era.

“Introducing auctions opens up enormous opportunities for us to accelerate our growth online and capture a significant new market of buyers and sellers.

“On top of the 2 million people that already use www.tradingpost.com.au each month, there are an additional 3.4 million Australians using online auctions that are not currently using Trading Post. 

“And while auctions have only just started on tradingpost.com.au, our aim is to build up the number of items available and become Australia’s favourite place to buy and sell,” he said.

It is this intention to build an auction from scratch that may raise a few eyebrows. Sensis' bid to compete with Google in the search space has not exactly been a scintillating success, although in the mapping area Sensis has done well. A number of local auction sites such as Oztion.com.au, Auctionbidz.com.au, Topauctions.com.au and Bidsell.com.au, among others, may well have served Sensis well as an acquisition.