Trade Me boss Macdonald takes new Facebook Marketplace 'very seriously'
Trade Me Group chief executive Jon Macdonald told investors at the company's annual meeting that the company takes the arrival of Facebook marketplace very seriously but that he believes the market can be defended.
The social media giant launched its marketplace in October, after trialling it in New Zealand for a year. It is only open to individuals, rather than companies.
Responding to a question from Shareholders Association representative Matthew Underwood, Macdonald said, "we would be fools to not take Facebook very, very seriously. The thing that they bring that is different from other potential competitors that we've had in our general items marketplace is that Facebook comes with its own network."
"With these businesses, it can be very difficult to get to critical mass, you need to get lots of people visiting you, you need to get inventory and that can be quite tough. Facebook has a bit of a headstart in that regard."
He added that the trial meant Trade Me had had time to prepare: "We've had a lot of time to think about it and improve our offering to defend against them, and I think we can do a great job with that."
Mr Macdonald also pointed out that Trade Me has been successful in holding off rivals in the past, saying "these big global companies do bring a lot of resources but Facebook and, prior to Facebook, Google, have had a good number of attempts at our marketplace and other parts of our business as well. The first Google attempt was back in 2005. So far we've been able to defend our patch."
About 30 shareholders attended the meeting at Te Papa in Wellington and were told that the business was performing in line with forecasts. However, Mr Macdonald highlighted that "we are seeing some weakness in the volumes of real estate listings which we consider to be very much related to the real estate market. The primary driver of revenue in this part of the business is the number of new listings that come to market, not the price they sell at."
Realtors, particularly in Auckland, have reported that the market is much slower than it was a year ago, partly due to new Reserve Bank rules on lending.
Last month, Trade Me rival realestate.co.nz reported that listings were down 12.3% compared to a year ago. Mr Macdonald told investors that despite the fall in volume, Trade Me had gained market share.
Chairman David Kirk led a round of applause from investors for founder Sam Morgan. Mr Kirk said Morgan's initiative and hard work had "allowed many many New Zealanders to build thriving businesses, and many more New Zealanders to find that quirky thing that they were looking for because of Trade Me."
Mr Morgan was elected as a director for the final time and will step down during the year to focus on early-stage businesses and his charitable foundation. Director Katrina Johnson was also elected to the board.
The shares rose 4.1% to $4.55, outpacing the benchmark S&P/NZX 50 index's 1% gain.