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Amazon Vs. eBay Heats Up

EBay Inc.announced a big expansion of its ‘eBay Now’ same-day delivery service as the company battles with rival Amazon.com Inc. for dominance in the emerging online local commerce market.

EBay upgrades delivery services

EbayEBay Now, which delivers products from stores such as Target, Walgreen, and Best Buy in as little as an hour, was released a year ago in San Francisco and San Jose, California and Manhattan, and New York.

EBay is expanding their service to Brooklyn and Queens in New York and to the Bay Area peninsula in the coming weeks.

Chicago and Dallas will be added later this summer and the service may expand outside the United States in the future, eBay executives said.

Additional location as mini storage and distribution hub

EBay doesn’t own inventory so it cannot directly compete with Amazon. Instead, it is going to team up with retailers to make a network of existing physical stores that will operate as mini storage and distribution hubs for online purchases.

“This is eBay’s answer to Amazon getting fulfillment centers closer to consumers,” said Ron Josey, an analyst at JMP Securities.

Both companies are chasing the recent frontier in e-commerce: the 75% of retail spending that happens within 15 miles of homes.

If both EBay and Amazon can deliver such products fast, they could grab a bigger share of this local commerce market, J.P. Morgan analysts said in a statement to investors.