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literature review: amazon vs ebay - Essay Example
The recent economic performance of UK is not considered as healthy or encouraging as with the change in government and drastic cuts in public spending, the overall forecasts indicate slow growth rates. According to the estimates made by PWC, UK’s economy will grow only by 1%…
During recession times, the number of consumers referring to websites like Amazon.com and eBay is increasing and people are making money even during recession also. (Gribben, 2009). However, generally the trends are not very encouraging for eBay as its profits fell during recent times and it divested from its Skype business also. (Timesonline.co.uk, 2009).
The case of Amazon is however relatively different as the decline in the book sales on the high street stores is captured by online sellers such as Amazon.(Hall,2010). The profitability of Amazon has therefore risen even during the period of recession and it is generally believed that the Amazon has successfully withstood the credit crunch.(Arthur, 2009). This indicates that Amazon.com might have performed better than eBay during the recessionary period.
As discussed above that the consumers are referring to online sites like Amazon to order their book purchases. It may be important to note that other firms are gradually going out of the business due to credit crunch and it is generally because of this reason that firms like Amazon are gaining more market power and increasing sales in online retailing market. This aspect generally indicates the overall strength of the business model of the firm which is allowing withstanding the recessionary times also.
Fool.com declared amazon.com as one of the five companies which have been able to resist the recession and performed better during the days of downturn in the economy. It is however, critical to note that Amazon has been able to do this mainly due to the fact that smaller companies based on brick and mortar model have failed during the recession. (Munarriz, 2010).
Most of the success of the firm during the recession can also be attributed to the increased sales and acceptability of its state of the art “Kindle” which is used as an eReader for reading books on an electronic device rather than purchasing the ...