14 DAY TRIAL // eBay has announced an important strategic acquisition in Europe, the private sales site brands4friends for $200 million. The purchase will enable eBay to position itself in the emerging market where it has had no presence so far. brands4friends is particularly strong in Germany, where it has 3.5 million users, but has interests in other markets.
"We want to give our customers the best possible fashion experience online," Doug McCallum, Senior Vice President for eBay in Europe, said.
"With the acquisition of brands4friends, we will enter the online shopping club market with an established and dynamic partner who has the expertise, relationships and passion to match our own ambition. We expect many eBay customers will enjoy great deals on international fashion brands by joining the brands4friends community," he added.
The brands4friends site offers daily deals of heavily discounted luxury clothes and other items from well-known brands. The three-year old company has been seeing some strong growth and is said to be generating sales of about 1 million euros per day.
brands4friends has 4.5 million users globally, 3.5 million of which are from Germany. The company employs some 600 people and has stakes in the British secretsales.com and brands4friends.jp.
Private sale sites are becoming increasingly popular and the market is getting crowded. The acquisition should help eBay get a stronger foothold in Europe and also enter the private sales market.
While it has secured a deal with Groupon, eBay hasn't made any other move in the deals and group-buying market. Amazon on the other hand already acquired the private sales site BuyVIP as well as invested in LivingSocial, one of Groupon's most successful competitors.
eBay has been struggling to drive up revenues for its main marketplaces division, which includes the auctions site. But PayPal has been constantly outperforming the other groups at eBay.