Why GameStop’s Bid to Take Over eBay Is Important to the Secondhand Apparel Market

GameStop submitted a non-binding bid to buy eBay for nearly $56 billion.​GameStop submitted a non-binding bid to buy eBay for nearly $56 billion. 

GameStop Corp. wants to buy eBay Inc. for nearly $56 billion, a bid that could put one of the world’s largest online marketplaces for preloved fashion in the hands of the gaming retailer.

The retailer said it submitted a non-binding proposal on May 3 to fully acquire eBay for approximately $55.5 billion. On Monday, eBay said it would review the bid with the best interest of the company and its shareholders in mind.

GameStop, in essence, said it can run eBay better than eBay. In a statement, the retailer noted how the online marketplace spent $2.4 billion on sales and marketing last year, “while only adding one million net active buyers” or “a net increase of less than 0.75 percent” to a total of 135 million.

If the deal pushes through, then eBay under GameStop leadership will be able to save $2 billion in annualized costs within the first year, GameStop asserted—not to mention gaining bigger earnings per share and a national network of over 1,600 GameStop stores.

Neither the press release nor the bid documents mentioned the preloved apparel market, the second top-selling category on eBay. Neither company responded to queries about the deal’s implications for the category.

Nevertheless, the proposed takeover deal could have broad implications to the global secondhand apparel market, which, according to the Boston Consulting Group, is estimated to hit up to $360 billion in 2030, growing three times faster than traditional fashion retail.

While other online marketplaces for secondhand apparel like ThredUp and The RealReal have gained traction over the years, none currently compares to eBay in terms of size and reach: 190 markets around the world with 135 million active buyers, according to Iva Jestratijevic, who previously co-authored a study on re-commerce in global fashion retail.

“From all of the platforms we currently have all over the world in the area of secondhand fashion, eBay, without reservation, has the largest pool of active buyers,” Jestratijevic, who also teaches branding and promotion at the University of Texas, told Sourcing Journal.

But beyond scope, eBay is special because of its reputation: a big brand with the appeal of a small business thanks to its network of resellers, she said.

“The brand itself is so powerful and reliable. Today, consumers are not trusting [of] big brands. They are supportive towards smaller brands,” she said. “eBay is an exception.”

“If there are any changes in the ownership or branding, it may [lead to] a lack of trust,” she added. She deferred from commenting on the specific GameStop bid, noting that she was speaking in general terms.