One of the leading research companies IBIS World predicts that these factors will accelerate industry
revenue over the five years to 2017. Small companies account for more than two thirds of the online
auction industry, even the largest firms which are ebay.com and Amazon.com account for less than 15%
of the industry revenue this means that the industry has low concentration.
Provided data from the IBIS World indicates that 54.3% of the industry is operators without employees,
and most of the other companies have fewer than 5 employees. The business nature plays a role in the
business demand, the online auction business is not costly to start, and also does not require skills. The
industry concentration has increased for the past five years due to recent acquisition and the product
expansion of the major market player to allow more reach.
The company will operate in the “penny auction market”, which is infant but highly sensitive, attractive
and growing with a number of competitors who has established themselves very quickly in this market.
As this is very sensitive market so one bad rumor may result in complete wiped out from the market. The
core market is little bit different from the traditional eBay auctions. Therefore, the company must obtain
an advantage by constructing trusting relationships with consumers as to be classified as a reliable
company that consistently delivers valuable deals.
There are ninety-five businesses registered as electronic auctions services, with total annual sales of
901,901 ($1,000), with 2,899 people directly employed within this sector, according to 2002 historical U.S.
census data. More generally, the e-commerce industry in which Smart Tech competes is forecasted to
increase 13% from 2012 into 2013, being valued at $262 B (Roberge, Johnson & Mulpuru, 2013). As
general consumer spending is expected to increase, along with e-commerce adoption rates, the usage of
online auctions will increase.
In the year 2013, user experience is seen as an investment area to drive future revenue. Additionally,
securing methods for reducing shopping cart abandonment rates are key areas of focus for companies
during the year. Smart Tech will focus on creating a competitive user experience that conveys a
trustworthy business platform and continuously strive to reduce the shopping cart abandonment rates
through consultation of web experts.