Walla! restarts an Israeli version of eBay
Walla! announced yesterday two new services which are local versions of eBay and Paypal.
Walla!Buy is an online market and auction site, while Walla!Pay allows users to make secure payments without revealing their credit card details. The development of the sites, similar in design to the U.S. sites that they emulate, took more than a year and cost more than NIS 2 million.
Walla!Shops CEO Uri Nadler explained that Walla!Buy works as an open trading arena, in which any individual or business can offer items for sale. Nadler expects the new site's revenues to reach NIS 300 million within three years.
The site allows fixed-price sales, auctions and also classified ads for items which are not yet for sale such as vehicles or real estate. When an item is paid for using Walla!Pay, the money is charged from the buyers credit card to Walla!Pay, and then the buyer must confirm that he has received the item before the money is transferred to the seller. Items can also be delivered by UPS, at an extra cost of NIS 49, and then the money is transferred to the seller once the courier confirms delivery.
Walla! will charge 6 percent commission for every sale. Additionally, at the end of the initial introductory period, Walla! will charge NIS 3 for each item offered, and a registration fee for each user. Prominently featured items will cost extra.
Nadler admitted that this is Walla!'s second attempt at setting up an online trading system. The first, which had the same name, began operating in 2000, and also attracted a lot of activity, he said.
Until now, there has never been a successful second-hand trading site in Israel, which could emulate the phenomenal success of eBay on a local level. "In 2000 we were not ready", said Nadler. "You couldn't make payments and in effect couldn't close a deal online."
There were several reasons for the failure, first of which is size. EBay's success is based on 181 million users, 72 million of which are active. However, Nadler is relying on the widespread penetration of the Internet since 2000 and on some new features, the most important of which is Walla!Pay. He referred to a survey that showed that 40 percent of Israeli surfers, or 1.5 million people, shop on the Net. Walla!Shops also hopes that its own popularity will help promote the new site.
Another problem is the trustworthiness of anonymous sellers, and to solve this Walla! have imitated eBay's feedback system. However, size is a problem with this too. The number of users on eBay makes the feedback system into an accurate reflection of the seller's trustworthiness. Walla! offers to verify the sellers details for an extra charge.
Omri Lavi, one of the founders of the Israeli eBay users' community, mentioned another problem.
"It won't suit Israelis, and not only because of what everyone thinks", he said. "Israelis don't like to have garage sales and smile at people. They can't sell something for 75 cents that they paid a dollar for years ago. Instead, they start at $2 and go down to $1.50."
Lavi said that if Walla!Buy does succeed, it might attract interest from eBay.
"Once, when they were small and millionaires, they used to go to a country and build a site. Now that they are big and billionaires, they find out who the big operator is in the country and buy him out."
Walla! and TheMarker both belong to the Haaretz Group.