EBay CEO "cautiously optimistic"

NEW YORK (Reuters) - The chief executive of EBay Inc (EBAY.O) said on Thursday he was "cautiously optimistic" about the economy and consumer spending, while estimating that e-commerce will double in the next five years.

Speaking at the Reuters Global Retail Summit in New York, John Donahoe said he estimates that e-commerce would grow at a rate of two or three times retail sales during that period.

But in the uncertain economic environment, in which consumer spending continues to be weak and investors nervous, eBay cannot waste too much time worrying about market fluctuations, said Donahoe, acknowledging that jitters in the market could reemerge.

"But our focus, frankly, with a company the size and scale of ours, we can't get too focused on short-term movements in the market," said Donahoe. "What we need to do is capitalize during this period and make sure we're gaining share."

Part of the challenge is reinvigorating eBay's stalled marketplaces division, where consumers can sell or buy goods at auction or with fixed prices, search classified ads, and buy tickets to sporting events or concerts.

A new focus for eBay -- owner of Web payment service PayPal and telephone unit Skype, which it plans to carve out through an IPO -- is the secondary market, where it hopes to profit from large volumes of new but out-of-season goods.

"Everyone is looking for incremental sales right now," he said. "We don't have to provide incentives, everyone is looking for alternative distribution channels."

EBay was not set up to sell bulk items a year ago, nor was it easy for buyers to find such goods on its site, but recent listing changes have addressed those issues, Donahoe said.

Even as e-commerce has become increasingly more sophisticated, and consumers have come to expect slick Web sites that focus on brand experience, Donahoe said there was much to love about a more bare-bones approach based on deals.

He equated bargain-hunting on eBay to shopping at warehouse retailer Costco Wholesale Corp (COST.O).

"Does going into a cement warehouse pushing a bin, does that hold up in a world where retailing is becoming more and more sophisticated? I would say Costco's growth numbers indicate that it does," Donahoe said. "Because people want a deal. And actually you can build brand loyalty ... around having a deal."

EBay is in the process of transforming its image as an online auctioneer into a global Internet marketplace and payment service, with PayPal now a third of total sales.

But in recent quarters, the waning worldwide economy has hit eBay's revenue, along with the effects of the stronger U.S. dollar on international sales.

Wall Street analysts often pit eBay's performance with that of online retailer Amazon.com (AMZN.O), but Donahoe said the two different companies can coexist.

"Everyone assumed it was going to be winner take all in the online world. I don't believe that," he said, citing "multiple winners" each taking a fragment of the market.

"Just as Wal-Mart (WMT.N) and Costco can co-exist, Amazon and eBay can co-exist," said Donahoe.

Asked about China, Donahoe defended the company's decision to be in that market through a joint venture with Tom Online.

"Over time we think the joint venture route is the way to go in China. Chinese entrepreneurs, a Chinese-owned entity or a Chinese-majority owned entity is, we believe, at least over next five years online, going to be the winning entities there," he said.

"It's not a coincidence that Google (GOOG.O) is not a leader in China, but Baidu (BIDU.O) is. That eBay is not a leader in China, that TaoBao (1688.HK) is. That PayPal is not a leader in China, that Alipay is .... "

"The Chinese companies are leading in all the Internet categories and the big global players that are leading almost everywhere else are not," he said, citing issues over government meddling into multinational corporations. "My approach and my thought process is, let's let this play out for the next three to four years."

(Reporting by Alexandria Sage; Additional reporting by Nicole Maestri; Editing by Richard Chang)