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'eBay Has Peaked': E-tailer

By Oonagh Reidy | Monday | 05/08/2013

Founder of Pure play e-tailer Becextech talks online, and why eBay isn't all its cracked up to be, in an interview with CN.

Melbourne-based electronics e-tailer Becextech has been operating here for the past 7 years and has over 100,000 Aussie customers to date. 

But it is still on the rise, adding 15-20,000 new customers per year, says Indonesian-born Santo Ludy - the founder of Becextech. 

"Every year I see growth in our online stores" he says, and expects to double customer growth to 40,000 every year in the coming years. 

The site currently sells to the Aussie and NZ markets but has ambitious plans to go further afield, and sells everything from appliances, camcorders and phones. Brands includes Phillips, Toshiba Lenovo and Samsung, 

Becextech, one of the earlier entrants into the online retail scene, first started trading on eBay, but within a year turnover hit $1m. 

The first major growth was in '08, and now turnover has increased eight-fold to over $8m, although there was a dip in 2011, which may been associated with GFC. 

Becextech main competitors are Kogan, Topbuy and Hong Kong based DWidigital cameras.  

eBay Doesn't Pay

But the online model is changing and Ebay has "peaked," Ludy believes. 

The US etailing giant keeps increasing their fees, which now stand at 5.1% - forcing sellers to rethink their web strategy and go it alone on their web stores.

Quite simply, etailers can make more money, and charge the consumer less on their own webstores. 

eBay "was like a stepping stone" for the company, says Ludy, but now has the customer base to grow on its own. 

The online giant is "not always cheaper" he says, noting several majors, including The Good Guys prices are more expensive on their eBay store than their standlone site.

 "Consumers will buy less and less from eBay unless their change their pricing structure," he warns. Online sellers are now getting bigger, and don't want to cough up the fees.  

eBay is also useless for building customer loyalty. "Its all about prices - if you're undercut by a seller [on eBay marketplace] you lose the sale."

"We're looking to develop long customer retention, not just new customers," says Ludy.  

The website has just expanded into the NZ market, and in the first 24 days of trading, recorded sales of $73K, which he admits was was "surprising" since marketing activities was limited to Search Engine Optimisation (SEO). 

But NZ is smaller market with not as many competitors, unlike Australia, where online trading is now well developed, and new operators emerging all the time. 

But Ludy sights are set well beyond the southern hemisphere.

Becextech also plans a UK launch and into the US market, next year. 

In terms of what electronics consumers are buying, Samsung S4 is by far and away its biggest seller of all time, while Samsung Galaxy Note 8.0 was also a big seller last year. 

However, GoPro cameras are also a hot item at the moment, he says.

Last year also saw momentum for the Amazon Kindle, a device not widely available here (Dick Smith one of the only big name retailers selling it, locally). The Aussie based e-tailer has a direct relationship with Amazon.  

However, demand for consumer electronics fluctuates, says Ludy.  In particular, iPhone demand slumped "especially when Galaxy S4 was released". 

"Apple has to do something about this" he believes, noting the similarity of all iPhones generations' to date. 

Apple is making progress, he admits buts believes its too "slow", compared to Android which has been "aggressive" in is advancement.  

In terms of pricing, Becextech "generally charge between 15%-50% less than store RRP 's..but it depends on the item". 

But the etailer is obsessed with offering the most competitive prices.

"We update our prices every day in response to fluctuations in the dollar," and has a dedicated team monitoring prices. 

The company has a base in Hong Kong although does not supply the local market, but its cheaper to outsource from Asia, says the etailing boss. 

This is a trend which seems to be growing with Myer establishing an Asian sourcing base and Dick Smith. 

Hong Kong is a freeport country, so goods don't get taxed, unlike Australia, says Ludy. 

"These savings are then passed on the consumer."  

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