NEW YORK, United States — How can a company be both the second-place player in its fast-growing industry – and largely excluded from the conversation about the future of said industry?

That's the weird position occupied by EBay Inc. The company grabs a larger share of the U.S. e-commerce market than Walmart Inc., Apple Inc., and every other retailer besides Amazon.com Inc. The $95 billion of goods and tickets sold on EBay's sites last year was more than Target Corp.'s annual revenue. EBay has 179 million active shoppers, while Nordstrom Inc. served 35 million shoppers in fiscal 2018.

Yet analysts and industry insiders tend to frame U.S. e-commerce as a showdown between Amazon and Walmart, and retail CEOs don’t wax poetic about their EBay defence strategy. In the last year, EBay came up in the earnings calls, presentations and shareholder meetings of 86 companies in retail, consumer products and similar industries, according to data compiled by Bloomberg. Amazon came up in events of 670 companies in those sectors, the data show.

EBay’s absence from those conversations is partly a result of deliberate choices. It has opted not to plunge deeply into some hot e-commerce corners and focused on its strengths: loyal customers, global reach and a business model with better economics and less risk. The approach is pragmatic, but EBay is missing opportunities as online shopping reshapes the $20 trillion in annual global retail spending.

The irony is, EBay was an early entrant in the rapidly expanding e-commerce market, but it hasn't been lifted by the rising tide. Annual U.S. e-commerce sales have tripled since 2010, Census Bureau figures show. The total value of merchandise bought on EBay’s shopping sites and its StubHub ticket service increased 77 percent over the same period. Even excluding Amazon, EBay recently has grown at about half the rate of the U.S. e-commerce market, Wedbush Securities estimates.

Part of the lag may be that EBay's sales are concentrated in the wrong spots. Compared with Amazon, EBay sells a smaller share of products in categories such as groceries, household products and home goods, according to an analysis by Edison Trends. Those are projected to be among the faster-growing online shopping categories.

Amazon, Walmart and others are also stressing their advantages by melding features of e-commerce and physical stores – through in-store pickup for online orders and drive-through purchases, for example. EBay, which generates the majority of its revenue outside the U.S., is dabbling in both; it entered into a groceries partnership in Australia with Coles and a venture in the U.K. with Argos for picking up online orders, among other things. There’s a logic to not making notoriously low-margin groceries a centrepiece of EBay’s strategy. But it leaves the company vulnerable to retailers that are investing heavily in this high-frequency purchase category that encourages regular visits.

EBay is a marketplace, a middleman of sorts that connects buyers and sellers but doesn’t sell goods itself. Walmart, Target and Amazon are gravitating more toward this approach — which both validates what EBay has been doing all along, and makes its life tougher. There will be a pitched battle to lure the best product sellers and provide strong technology and infrastructure to support them.

Insurgents, too, are chipping away at what could be – even should be – EBay’s turf. This was a point that activist investor Elliott Management Corp. made in its recent campaign that resulted in new directors and a strategic review. Sneaker marketplace Goat, sneaker-and-streetwear marketplace Stadium Goods and the RealReal, a luxury apparel-and-accessories consignment site, are among the upstarts that have already claimed some space. Those ventures may fail, but they’ve demonstrated shopper interest that EBay wasn’t fulfilling.

The blossoming of alternative marketplaces dovetail with EBay’s market share declines and the deterioration of how U.S. shoppers view EBay’s brand. Amazon leads a set of retailers in an impression score based on surveys by market research firm YouGov. Target and Walmart have improved their impression score in the last two years, while EBay’s score has declined slightly. There’s risk that perceptions about EBay are calcifying, and some people don’t even consider shopping there.

It's tough to say what EBay should do differently, if anything. Elliott hasn't articulated a blueprint to kick-start sales, besides saying EBay is unfocused and mismanaged. Some possibilities: EBay could go deeper in categories such as clothing or auto parts where it’s strong, and lean into its identity as a place for deals and unique products that aren't on Amazon or Walmart. It could stress its friendliness to companies that want to sell more online but are wary of Amazon.

EBay provides a test case of  how to navigate a quickly changing industry. The company believes it’s better off not aggressively chasing fast-growing – but low-margin – sales of items like toothpaste and bananas that are fueling e-commerce growth. From that perspective, EBay doesn’t have fundamental flaws; it merely needs to be better at what it does by simplifying purchases, improving product-listing pages and providing more helpful data to EBay sellers.

It’s hard to ignore, however, that the broad shift to online shopping is creating unique opportunities for those willing to take big risks in the name of claiming market share. EBay’s defensible caution may leave it still profitable and viable in 10 years, but also regretting it missed a golden opportunity.

By Sarah Halzack and Shira Ovide; Editor: Beth Williams 

The views expressed in Op-Ed pieces are those of the author and do not necessarily reflect the views of The Business of Fashion.