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Trade Me continues market domination with new services and increased profits

  • News
  • August 28, 2015
  • Elly Strang
Trade Me continues market domination with new services and increased profits

Trade Me’s story is an interesting one. Founded in 1999 by Sam Morgan, it started out as a buy and sell site for goods.


Trade Me in 1999

Fast forward fifteen years and Trade Me has become a giant in the Kiwi online space.

A survey by Ipsos into what are the top ten brands New Zealanders favour found Trade Me was in the top three, rivalled only by Google and Facebook.

The driving force behind people choosing Trade Me was the trust they had in the brand.

It also hasn’t restricted itself to buying and selling goods, expanding into jobs, find friends, daily deals, property, and now insurance.

It launched Trade Me Insurance in August, which was backed by Tower Insurance.

Trade Me CEO Jon Macdonald says “encouraging progress” had been made over the year with the company.

He says the venture into insurance complements Trade Me’s other financial services, such as its ‘pay now’ feature on auctions.

Judging by Trade Me’s recent moves, it’s acquiring businesses the same way Facebook has recently done to makes itself the home page for everything and anything.

Trade Me has recently gained a 14 percent stake in peer-to-peer lender Harmoney and has taken over Paystation’s online credit card processing and payments gateway in 2014.

It also bought Viewing Track, a Wellington-based company that makes organising tenants and property managers viewing rental properties easier.

This outwards expansion, coupled with its buying up of any competitors that stray into close territory, shows Trade Me is keen to dominate its share of the market.

Its performance in its primary function, selling general items, was down 2 percent on the previous year.

This may be because sellers are turning to other means that don’t charge a fee, such as Facebook buy and sell groups.

Facebook recently confirmed it is testing its own buy and sell section in New Zealand.

However, Macdonald says recent signs show promise that things will pick up.

“We’ve seen sales in our marketplace go from mild decline at the beginning of the year to consistent growth by the end of the year,” Macdonald says.

The Motors, Property and Jobs sections all performed well, with revenue up 16 percent across the three to $99.6 million.

Motors was the stand out performer, with a 24 percent lift from 2014.

Trade Me Jobs also improved its listings growth and was up 14 percent year-on-year.

The property section continues to be the most visited property site in New Zealand, with more than double the audience of its nearest rival. Revenue was up 5 percent.

Trade Me chairman David Kirk says the results are consistent.

“The result is right in line with our expectations, with double-digit revenue growth and another high tide mark for overall revenue,” Kirk says.

Macdonald says they expect similar revenue growth in the 2016 financial year, although he expects the performance will be better in the second half.

He remained upbeat about Trade Me’s future, but didn’t disclose any details about future acquisitions.

“We have bolstered our team, have better products, and improved sales and account management. We have a great future," Macdonald says.
 

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