Google
 

Aardvark Daily

New Zealand's longest-running online daily news and commentary publication, now in its 25th year. The opinion pieces presented here are not purported to be fact but reasonable effort is made to ensure accuracy.

Content copyright © 1995 - 2019 to Bruce Simpson (aka Aardvark), the logo was kindly created for Aardvark Daily by the folks at aardvark.co.uk



Please visit the sponsor!
Please visit the sponsor!

Is TradeMe really worth billions?

23 November 2018

When TradeMe sold for nearly three quarters of a billion dollars a few years ago, a lot of people (including myself) were surprised.

Well, if you think that was a pretty high price, consider recent talk that an offer is about to be made for the auction site of somewhere between one and two billion dollars.

Crikey!

Is TradeMe really worth that much?

I have to say that if I was holding TM shares, I'd sure jump at the chance to flick them off for this much money... and I'd do it for a number of reasons.

I recall that when Telecom sold the Yellow Pages part of its business I felt it was stunningly good timing on the part of the telco.

At the time, Yellow Pages was a real money-spinner, and had been for countless years.

This was an era when the Yellow Pages business directory was the "go to" reference for virtually all sorts of businesses. Need a plumber -- go to the Yellow Pages. Need a real-estate agent -- Go to the Yellow Pages.

However some of us (including Telecom) could see that the internet was about to change things forever and that within the span of a few short years, the Yellow Pages would become pretty much worthless.

Indeed, that's exactly what's happened and now, whenever someone wants a plumber, electrician, or *anything*, they just grab their phone and Google for that information.

Telcom's timing was exquisite. They sold Yellow Pages when the business was at its very apex, just months later the decline began and now it's a whole lot of nothing.

And so, I believe, it is with TradeMe.

The world has changed a lot since TM appeared on the scene and rose to undeniable dominance here in New Zealand.

TM has gone from being solely a platform for people to buy and sell second-hand stuff to being primarily a platform for retailers to flog their wares to a large audience. Most of the listings in quite a few of the categories are from professional traders rather than individuals and most of the goods in those categories are brand-new.

This makes TM increasingly into an online retailer rather than a true auction site.

The company may have dominance in auctions -- but when it comes to online retail they're going to be taking a real hammering over the next few years.

First we have Amazon, who look to be setting up to become more aggressive in the NZ marketspace. Buying from Amazon has many advantages over TM. There are money-back guarantees, online product reviews and an astonishingly high range of products.

Secondly we have the likes of DX.com, Bangood, Ali Express and the like. If you go searching for something on TM then spend just a few extra minutes trawling through Ali Express then it's almost certain that you can get the exact same product at half the price -- with free shipping.

People are becoming far more tech-savvy these days and are prepared to purchase from offshore etailers when there's a few dollars to be saved. The impact of this is only just starting to become apparent but within a few short years I believe it will rip right into TM's bottom line.

Of course TM still has its property and vehicle listings to get by on -- but if you remember AltaVista and GeoCities you will be very much aware that even the biggest and most successful online entities can disappear very quickly when something better comes along.

So, if a decent offer is made for TM and you've got a fist-full of TM shares, sell, sell, sell. I do not think you will be disappointed!

And besides which, you will also dodge the capital gains tax that the government is seriously contemplating enacting in the near future.

Please visit the sponsor!
Please visit the sponsor!

Have your say in the Aardvark Forums.

PERMALINK to this column


Rank This Aardvark Page

 

Change Font

Sci-Tech headlines

 


Features:

Beware The Alternative Energy Scammers

The Great "Run Your Car On Water" Scam

 

Recent Columns

Asking for trouble
First of all it was Google denying Huawei its Android OS and related services...

AMD's Ryzen star
The world waits with bated breath for the upcoming announcements by AMD's Lisa Su...

Why I might buy a Huawei phone
Boy, has the USA got "the hates" going on for Huawei right now don't they?...

We are going back!
We're less than two months away from the 50th anniversary of the first footprint made by man on the surface of the moon...

Do not be afraid of the dark
Beware the LED lights you've just installed as a method of saving the planet. They could cause you serious injury...

DJI, the new GoPro
GoPro changed the world of "action" photography and video forever when it introduced its first action camera some 15 years ago...

Jacinda Ardern - bewildered and confused
I'm often accused of being cynical - but I have my doubts that this is true :-)...

When new is worse than old
Hands up everyone who remembers the timeless Kiwi chocolate classics?...

Register, register, register
More bandaid solutions to complex problems are on the way...

Green versus green
You can't make an omelet without breaking eggs...

Forget EV batteries
Infrastructure issues aside, the biggest thing slowing down the evolution of the electric vehicle is battery technology -- or the lack of it...