“I manage the apparel category at Amazon and came across you guys with a really cool selection. I was curious to see — have you looked at selling on Amazon?” read an example pitch from an Amazon employee.
That come-on was detailed in an 18-page complaint filed by eBay against Amazon late Wednesday, alleging Amazon employees set up eBay accounts and used the company’s messaging system to persuade multiple “high-end” eBay sellers to consider selling on Amazon. The company’s member-to-member messaging system allows eBay members to communicate directly between each other and the company.
EBay alleges Amazon employees, who described themselves as part of a “hunter/recruiter team,” had “zero purchases, zero listings, and zero sales on the eBay platform,” thereby violating eBay’s User Agreement and policies.
While the complaint did not state which categories were targeted by Amazon, multiple examples of pitches from Amazon employees referenced apparel, an area Scott Cutler, eBay’s senior vice president of North America, has described as one of eBay’s “fastest-growing areas.” During June’s conference call he called eBay’s stake in the fashion market a “tremendous future opportunities to leverage for growth.”
A representative for eBay confirmed in an email to WWD that the numbers regarding the “scale and scope” of damages to eBay will “likely surface as the lawsuit moves forward.”
EBay’s stock slipped 1.5 percent to $31.55 on Thursday, down from its high of more than $44 earlier this year. Shares of Amazon fell 3.3 percent to $1,770.72.
Richard Kramer, cofounder and senior analyst at Arete Research, said he doesn’t think Amazon or eBay are major forces in apparel, because “they don’t have the browse/ discovery function on their sites,” making it difficult for shoppers on the site to discover new fashion lines.
But a September Wells Fargo note to investors pointed out that Amazon’s softlines, including apparel, are growing at a rate of about five times the amount it was five years ago and that Amazon took 7.2 percent of the total apparel and footwear market last year, including e-commerce and physical retail. Amazon logged apparel and footwear sales with a gross merchandise volume of nearly $25 billion last year, following only Walmart, with $29 billion. Other major apparel players include T.J. Maxx and Target.
EBay, by contrast, has a much smaller slice of the apparel market. The company’s total gross merchandise volume tallied $88.4 billion last year, according to the complaint filed in California state court.
Fashion could help eBay build its business, which many shoppers still associate with a web site for buying vintage items. The complaint pointed out that 80 percent of items sold on eBay are new.
“We’re not known as one of the largest e-commerce fashion businesses in the world, yet, that’s true,” Cutler said on the conference call.
“We want to make sure that we’re bringing that fashion customer, that fashionista into eBay with a unique experience. So we’re marketing specifically to her,” he said.
EBay is seeking a trial by jury and a monetary award to be determined by the court.
Amazon did not respond to requests for comment.