eBay EBAY Business Risk Report

A. Competition from e-commerce giants like Amazon and Alibaba

eBay faces significant market risk from larger e-commerce platforms such as Amazon and Alibaba, which offer a broader range of products and more advanced logistics capabilities. These competitors have the ability to attract a larger customer base due to their scale and comprehensive services.

B. Economic downturn impacting consumer spending behavior

In periods of economic downturn, discretionary spending often decreases, which can adversely affect eBay’s sales volumes and profitability. As an online marketplace, eBay is particularly sensitive to shifts in consumer spending habits which can be influenced by broader economic conditions.

A. Data breaches compromising sensitive customer information

eBay collects and stores personal data from its users, making it a target for cyberattacks that could lead to significant data breaches. Such events could compromise user privacy and result in legal consequences and loss of trust among consumers.

B. Malware attacks disrupting online operations

Malware attacks can severely disrupt eBay’s operations by affecting the availability and functionality of its website. These disruptions can result in financial losses and could damage eBay’s reputation, leading to diminished user confidence and reduced transaction volumes.

A. Lawsuits related to counterfeit products sold on the platform

eBay often faces legal challenges due to the sale of counterfeit goods on its marketplace. The company could be held liable for trademark infringement or other intellectual property violations, which may result in costly legal battles or settlements.

B. Compliance with international trade regulations

As a global marketplace, eBay must adhere to various international trade regulations, including customs duties and import/export restrictions. Non-compliance can lead to fines, penalties, and a disruption in cross-border trade which could affect its operations and reputation.

A. System outages leading to service disruptions

System outages are a significant risk for eBay, as any downtime can lead to service disruptions that directly impact sales and user experience. Such outages could result from technical failures, cyberattacks, or external factors beyond the company’s control.

B. Supply chain disruptions affecting product availability

Although eBay primarily operates as a platform connecting sellers and buyers, supply chain disruptions can still significantly affect its business. Issues such as delays in shipment or a lack of inventory from sellers can deter buyers, affecting the platform’s reliability and attractiveness.

A. Foreign exchange rate fluctuations impacting revenue

As eBay operates in various international markets, it is exposed to currency risk where foreign exchange rate fluctuations can impact its revenue and earnings reported in U.S. dollars. This exposure can lead to volatility in financial outcomes.

B. Credit risk from customers defaulting on payments

eBay allows buyers to make purchases on credit, primarily in jurisdictions where this is customarily required. This exposes the company to credit risk, where customers might default on payments, thereby impacting eBay’s financial position.