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TradeMe investors bail, profits slip

NBR looks at TradeMe's recent performance in Trade Me sits at crossroads, testing investor patience — the story is only available to subscribers.

After peaking last year with a value of NZ$2.15 billion, TradeMe's share price now values the company at $1.4 billion. The business has lost a third of its value in a year.

A boycott by Real Estate agents is only one problem the online auction business faces.

TradeMe dominates New Zealand online retail to the point where there's little scope for further growth.

It hasn't succeeded with attempts to sell new goods. Savvy online retailers run their own stores and already thin margins means little room to make money if TradeMe clips the ticket.

The company's only growth strategy seems to be increasing prices.

That's why Real Estate agents are not using the service. They aren't willing to pay increased fees to sell houses.

While reading the story I realised I haven't used TradeMe much in the last year and how little the site comes up in conversation.

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