April 2005Jewellery Category-an Update

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Agenda

• Ecommerce in India• Introduction to eBay / eBay India• Jewellery Category: An Update• Future Plans

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eCommerce in India

B2C eCommerce growth projections Internet Users growth projections

2001 2002 2003 2004 2005 20066.26 9.59 12.73 16.98 23.38 30.54

Total B2C market 2001 2002 2003 2004 2005 2006US$ million 26.72 50.17 95.35 167.92 292.63 491.71

-

5.00

10.00

15.00

20.00

25.00

30.00

35.00

2001 2002 2003 2004 2005 2006-50

100150200250300350400450500

2001 2002 2003 2004 2005 2006

Source: IDC

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eCommerce Brand Leadership

77%

63%57%

54%

47%

26%

38%

28% 26%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Baa

zee

Red

iff

Indi

atim

es

Yaho

o

Am

azon

eBay

MSN

FabM

all

Sify

BaazeeRediffIndiatimesYahooAmazoneBayMSNFabMallSify

Aided awareness of Shopping sites

Source Cross-tab survey July 2004Base: 724 respondents

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Agenda

• Ecommerce in India• Introduction to eBay / eBay India• Jewellery Category: An Update• Future Plans

6

What is an online marketplace?

• A platform for people to meet, transact goods and services and give each other feedback.

• Buyers and sellers from across geographical regions are brought together on a common platform

• What makes a marketplace different?

– Many to many

– Sellers can list across multiple categories

– The marketplace holds no inventory / does not own any of the goods

– Logistics responsibilities is with the seller

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He comes across the auction put up by “A” And places a bid on the

auction

Bid

“B” is a regular buyer oneBay India and is looking

for a mobile phone

Buy

WON

“B” wins the auction and gets in touch with “A” for Payment and Delivery

Terms

“B” Buyer

He uses the search featureto look for the mobile

“A” then fills in details about hismobile phone for the auction

Listing goes live within 30 sec.

“A” realizes that his auction has closed successfully as a

buyer bids on his product

Sell

“A” then decides toSell a mobile phone

on eBay India

“A” Seller

He goes and Registers oneBay India where he

accepts all terms of the site

“A” pays a commission toeBay India for its services

within 60 days of the transaction

“B” pays “A” for the Mobile Phone And “A”Delivers the Phone to

“B”eBay India generates an Invoice after 30

days of the transaction

“A” watches an ad of eBay India on TV

• Auctions• Buy It Now• Classifieds CLOSED

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How eBay Works

We make inefficient markets efficient for millions of users…

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The eBay Marketplace

SellersSellers

Lowest costLowest cost

Highest velocityHighest velocity

Seller toolkitSeller toolkit

BuyersBuyers

Joy of discoveryJoy of discovery

SelectionSelection

ValueValue

Efficient Efficient Online Online

CommerceCommerce

..Where Millions of Buyers and Sellers Meet

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eBay Overview

• Intersection between commerce and community

• Extremely efficient model, transparent financial structure

– Facilitates an exchange between a buyer and a seller

– No inventory, no warehouse

– No sales force

• Generates revenue one transaction at a time via…

– Final value fees and Enhanced Listing

– Payments through PayPal / Paisapay

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Introduction to eBay

• eBay is The World’s Online Marketplace

• Founded by Pierre Omidiyar in 1995

• eBay has 135 million registered users worldwide.

• More than 430,000 people in the USA, and thousands more around the world, are making all or most of their living by selling on eBay.

• On any given day, over 44 million listings across 50,000 categories of products and services

• Profitable since its launch, eBay net revenues totaled $935.8 million in Q4-04 and $3.3 billion for the full year 2004.

• The most expensive item sold on eBay to date is a private business jet for $4.9 million.

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Registered Users

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4

135Million

99%6 YearCAGR

1999 2000 2001 2002 20031998 2004

Q1 Q1 Q3 Q4 Q1Q4Q3Q2 Q2Q1 Q3 Q4Q4Q3Q2 Q3 Q1Q4 Q4 Q1 Q2 Q3 Q4Q3Q2Q2Q1 Q2

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Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

78%6 YearCAGR

Gross Merchandise Volume

20041999 2000 2001 2002 20031998

$9.8Billion

1999 2000 2001 2002 20031998

Q1 Q1 Q2 Q3 Q4 Q1Q4Q3Q2 Q2Q1 Q1 Q2 Q3 Q4Q4Q3Q2 Q3 Q3Q2Q1Q4 Q4 Q1 Q2 Q3 Q4

2004

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Revenue

83% 6 Year CAGR

1999 2000 2001 2002 2003Q1 Q2 Q3 Q4Q1Q2 Q3 Q4Q1 Q2 Q3 Q4Q1 Q2 Q3 Q4Q1 Q2 Q3 Q4Q1 Q2 Q3 Q4

2004Q1

1998Q2 Q3Q1

70%6 YearCAGR

Q4

$936Million

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Transaction Velocity

2.8US

2.2

3.4

Inc.4.4

Transactions per day (Millions) - Q4 2004

Source: eBay Estimates

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The eBay Community

135 million registered users worldwide…..Eleventh most populous nation

Buyers

• Average age: 25 to 55

• Value oriented

• Average income of $ 25 K to $ 80K per year

Sellers

• 430,000 people in the US make their living full or part time on eBay

• Almost 80% of small businesses using eBay have five or less employees

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In the US…

• 1 out of every 3 people in the US who were on the Internet, came to eBay

* Nielson NetRatings

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In Germany...

Internet usage

…accounting for 12.5% of all time spent on the Internet

…generating more GMV than the worldwide sales of Porsche

…driving 3x more visits per month than McDonald’s

Porsche

McDonald's

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In UK...

Internet usage

…generating 10% of all time spent on the Internet

…generating ~ 2.5 x more GMVthan the sum of all box office receipts

Box Office receipts

…just acquired 10 millionth user10 million users

10

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In Korea…

1out of 2 …half of the people in their 20’s and 30’s are our registered users

…one clothing purchase per every four Koreans in ’04

$,$$$,$$$,$$$

...reached $1 billion in GMV faster than any Korean retailer

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& Worldwide

eBay site

EuropeAustria BelgiumFrance GermanyIreland Italy Netherlands SpainSwitzerland SwedenUK

Argentina*Brazil*Chile*Colombia*Ecuador*Mexico*Uruguay*Venezuela*Peru*

*MercadoLibre sites

AmericasUSACanada

Minority investment

Asia/PacificAustralia KoreaNew ZealandTaiwanChinaSingaporeHong KongIndiaPhilippinesMalaysia

Presence in

32 Markets

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Introduction to eBay India

• Founded in March 2000

• eBay India is India’s leading online marketplace

• Over 1 million registered users from 240 towns in India

• Since Aug 2004, a 100% subsidiary of eBay.com

• Most popular online shopping destination. (Source: IDC)

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The eBay India Community

Over 1 million confirmed registered users…..from over 240 cities

Buyers

• Average age: 18 to 40

• Value oriented

• Rapid growth coming from Class B/C towns

• Get access to products not otherwise available locally

Sellers

• A few thousand people are making their living either full time or part time on eBay India

• Some of these sellers further employ 2-5 people

• Ethnic specialty products from Class B/C towns get Metro buyers

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Enabling Entrepreneurship

• eBay India is a great place to start a new business

– Low cost of entry

– Level playing field

– National access

– Global marketplace

• Entrepreneurs use eBay India to overcome geographic and other challenges to access a global marketplace

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The Community is National

•Users in over •240 cities

10 %

14 %

28 %

8 %

7 %

5 %

5 %

2 %

4 %

2 %

2 %

2 %

1 %

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Protecting eBay and the Community

• Over 1,000 worldwide employees in Trust & Safety

• Work closely with law enforcement worldwide

• User education– Frequent communication with community– Help center for new users– Prominent rules and safety overview– Prominent list of prohibited and restricted items

• Safety tools– Feedback Forum– Buyer Protection program– Verisign, Digital encryption– VERO

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eBay Feedback Forum..

Users submit comments about their dealings as part of a public forum

jhaveripinky (75)Vinayakcollection (143)

eBay’s priority: provide a safe, person-to-person trading experience

Seller Service -good. Product Quality - nice

Very Best buyer. Prompt payment, would look forward to receiving more orders in

future

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A Unified Global Brand

• eBay.in is a unified global identity for eBay India in line with eBay Inc.

• eBay.in domain was chosen to give us a uniquely Indian identity

• eBay.in allows for strong marketing strategies

• Brand morphing strategy is in line with other eBay countries (eg. China, Taiwan, France, Spain, Italy)

Upto July 2004 August 2004 onwards April 2005 onwards June 2005 onwards

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Global Trade: The Biggest Advantage for Indians

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Agenda

• Ecommerce in India• Introduction to eBay / eBay India• Jewellery Category: An Update• Future Plans

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A Vibrant Jewellery Marketplace

•Jewellery & Watches is a billion Dollar Category on eBay worldwide with $ 1.3 Billion in GMV•Worldwide Online Consumer Jewellery market is more than $ 2 Billion

•800,000 items are for sale at any given time

•35 items sell each minute

•Over a hundred watches sold every hour on eBay

•1 diamond ring, 1 pair of diamond earrings and 1 piece of fine vintage jewelry sell every 2 minutes

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A Vibrant Jewellery Marketplace

On any given day, eBay India, Jewellery Category has over 7,500 live listings at any given point of time.

A Ring sells every 41 minutes

A pair of Earring Sells every 56 minutes

A Pendent sells every 15 minutes

A watch sells every 4 minutes

Most Searched Product on eBay India “Diamond Solitaire Ring”

A piece of Jewellery sells every 5 minutes

A Bracelet Sells every 32 Minutes

A Jewellery Set sells 28 minutes

A Loose Diamond Or gemstone sells every 43 minutes

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Recent Unique Products sold on eBay India

3.5 carat heart shaped diamond ring for Rs. 1,90,000/-

Large blue diamond for Rs. 1,31.000/-

Special Black Diamond ring sold for Rs. 60,000

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More than 200 categories

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Jewellery Category Formats

Auctions (60 %)

Search eBay to see what is attracting the most bidding activity.

• If you have the same or similar product, list these products in the auction format.

• 93% of product listed in auction are successful.

Fixed Price (40%)

List in the Fixed Price format those products where you can take no less than X Rupees for the item.

• New sellers should use this format when selling items that cost less than Rs.500.

Shop Fixed Price – ( New )

First, open a shop on eBay so you can cross-merchandise your different listings and drive interested buyers to see all the product you are offering on eBay. There are 3 different types of stores: Basic, Featured and Premium.

• Then, list in the Shop Fixed Price format those products where you can take no less than X rupees for the item. New sellers should use this format when selling items that cost less than Rs. 2,500.

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Why People Buy Jewellery Online

• Range – Buyers can choose from vast range from the convenience of House or Office at his own budget.

• Perceived Value – Auction format works very well in Jewellery as Buyer can choose the product and bid as per his / her budget. Jewellery is a unique product line where it is non standard product and perceived value for each design is different for each design.

• Certification – Products which are certified by third parties such as IGI, EGL or GIA gives greater confidence.

• Feedback Score – Unique Process of Posting feedback is one of the comforting factor for buyer, as he can comment on product as well as on sellers service.

• Buy Back Guarantees / Product Return Policy – Sellers who have No question asked Product return Policies gives real confidence to buyers and we have seen sells of these sellers is higher than other sellers

• Buyer Protection – eBay India covers buyers for all purchases upto Rs. 10,000 or the price of the item.

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Being Successful in Jewellery & Watches

Selling Mantra :• Photos sell Jewelry! (Make sure your photos are clear and you’ve filled the frame.

Consider hiring a professional if you’re selling higher end product.)

• Use your brand name if you have a retail store. A recognizable or reputable or professional name will encourage more trust than a cryptic personal ID when you’re just getting started.

• Use the gallery feature. You’ll be included in more searches and promotions, and buyers like to see a preview of the item.

• Have fine jewelry certified from renowned Laboratories.

• Provide a return policy. It can be as strict or loose as you like, but you should state some policy so buyers know you stand behind your product. State it clearly in every item description.

• Accept Paisa Pay as a method of payment to make it easier for Buyers to purchaseyour items

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eBay Shops

Note: You can trial an eBay shop for Free for the first 30 days!! Thereafter you will be charged nominal monthly subscription Fees.

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Agenda

• Ecommerce in India• Introduction to eBay / eBay India• Jewellery Category: An Update• Future Plans

41

Global Trade

• Indian users can use one single eBay India ID to trade internationally

Indian sellers can sell on any of the eBay 32 country sites

Indian buyers can buy international products

• India is a very good source for eBay International Buyers

• Majority of exports to US, UK, Australia, Canada and Germany.

• Exports from India in around 15 categories. Major selling categories

– Diamond Jewellery

– Costume Jewellery

– Loose Gemstone

– Loose Diamonds 1 ct and above

– Color Diamonds

– Solitaire Diamond Rings

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What Next

Making Jewellery as destination category

Generating Jewellery Entrepreneurs

Global Trade – New Export Channel for Jewellery

Promoting Certification from renowned labs like IGI, EGL

Targeting buyers & sellers from B&C Towns

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In Summary

• We are an online marketplace• Every day, we focus on helping our users become successful by:

improving the user experience

helping sellers expand sales

Creating online marketplace for Jewellery

attracting and activating buyers

making online payments easier

creating new markets across the globe

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Testimonials