To a crowd of more than 3,000 merchants, developers and entrepreneurs, eBay launched X.commerce last week inSan Francisco. In this blog, we’ll look specifically at what X.commerce means for ecommerce merchants.
John Donahoe, president andCEOof eBay, describes X.commerce as ‘the world’s first open commerce ecosystem. It’s a full stack of tools for developers and merchants to make the new commerce a reality.’
The new commerce that Donahoe is referring to is a world where online, mobile, local and offline are merging at blistering pace. ‘We will see more change in the next 3 years in the way consumers shop and pay than we’ve seen in the previous 15 years. Offline retail hasn’t changed that much in the last 15 years. Ecommerce has been fairly distinct from the offline experience. Smartphones are blurring the lines between offline and online faster than anyone could have imagined.’
Donahoe refers to the new world as ‘not ecommerce — just commerce,’ referring to the increasing proportion of sales that are web-influenced or online — currently more than 50% of all sales.
While you may still think of eBay as an auction site, its intent to become a leader in ecommerce platforms has been clear for a while. Through a sequence of acquisitions, eBay has assembled a powerful collection of ecommerce tools. Yes, eBay is a software company now, as well as a payments company, and a marketplace.
What Exactly is X.commerce?
X.commerce is an integrated ecommerce platform that combines eBay, PayPal, Magento,Milo, WHERE, RedLaser and soon GSI into a single set of Application Programming Interfaces (API’s). It’s not one ecommerce platform, but a pre-packaged integration layer which means that all of the components are pre-integrated. So often software acquisitions are not followed through with the required integration to deliver against the promise. Not so here, and hats off to eBay for pulling this off.
What’s really cool about X.commerce is that eBay has integrated these into an environment where the whole is greater than the sum of the parts. For example, havingMiloas part of the same environment enables developers to easily build a ‘local’ aspect to their sites which combines stock availability based on proximity to the visitor.
The combined developer communities of eBay, PayPal and Magento exceed 850,000 developers, and there is already a blossoming Magento app store, though some developers were quick to point out that getting found in the app store is a challenge. Despite this, it is clear that there will be a thriving community of third party applications and tools already integrated with the X.commerce environment.
What It Means for Ecommerce Merchants
In practical terms, X.commerce offers significant benefits to software companies developing commerce tools, as well as to the merchants. Here, we’re going to focus only on the benefits for merchants. I’ve broken these down into three groups:
Easy Listing on eBay (and Other Market Places?)
Both Magento and GSI have been leading ecommerce platforms before X.commerce. What this changes, however, is that it makes these platforms significantly more attractive to merchants. Pre-packaged integration with eBay means that if you build your ecommerce store on either of these platforms, then you can list on the eBay marketplace in a matter of a few mouse clicks. Select the categories or individual products, and deploy. You’re now selling on eBay.
The X.commerce team is actively looking for other marketplaces to integrate with X.commerce. However, it remains to be seen whether this will happen in practice. Don’t expect Amazon to be integrated anytime soon.
The eBay team is also at pains to pledge that they will never compete with its merchants — a clear dig at Amazon — indicating that their vision is to provide enabling technologies rather than becoming a merchant.
Third Party, Pre-integrated Solution Marketplace
X.commerce already has a vibrant library of third party solutions by virtue of the Magento App store. Given the open nature of what eBay has done, we expect that many more developers will rush to write applications for X.commerce. eBay’s philosophy at the launch event was to nurture its community of developers and encourage them to become entrepreneurs.
This is important for merchants simply because integrating third party tools into an ecommerce site wastes resources. You don’t get anything per se from the integration effort, and if you change providers, you end up with a second integration cost. Pre-packaged integration is a big deal. It enables merchants to focus resources on projects than can deliver direct ROI and gives great flexibility in switching vendors (though not the platform itself).
Later this year, PayPal revenues will probably exceed eBay marketplace revenues for the first time. A significant element in the X.commerce strategy is to make PayPal ubiquitous within the Magento and GSI platform communities. Needless to say, PayPal, in all its flavors, is an integral part of the X.commerce environment, making it an easy option (a couple of mouse clicks) for any merchant to deploy in the X.commerce environment.
While X.commerce is strategically important for eBay, it brings significant benefits to both merchants and developers. A vibrant ecommerce ecosystem designed for the new ‘commerce’ that Donahoe refers to, coupled with a refreshing openness, is a clear winning proposition. Support for X.commerce is already strong: Adobe, Omniture, Facebook and others demonstrated slick X.commerce applications as part of the launch. It looks like eBay has a winner on its hands.