eBay Q4 Beats Expectations, but 5% Sales Growth Is Too Slow

eBay Q4 sales were up 5% YoY, generating $21 billion across all eBay marketplaces. Crucially $10 billion of that was on mobile.

eBay indicated that active buyers were up to 167 million from 162 million last year. However when we checked ebay.com web traffic on SimilarWeb we noticed that it hasn’t been growing.

All eBay metrics were better or as good as what analysts were expecting, however as far as marketplace sellers are concerned they are not good enough - overall US ecommerce is growing at 15%, compared to 5% eBay growth in the last quarter.

eBay has been mentioning the structured data initiative as a long term strategy for growth for a while now, but as of today only 4% of listings have it, CEO Devin Wenig said. 55% of listings with structured data requirements have been processed, but are not live yet. It is unclear what is causing the delays.

The key metric to notice is that auctions, the original eBay idea, are now only 13% of total sales. In 2013 it was at 30%, and just in 2007 it was at 70%. So in 10 years eBay went from being a primarily auction website, to a instant-buy platform.

In those 10 years eBay competition with Amazon has become increasingly important. However, eBay is taking too long to overhaul the online and mobile experience. Too much of the website experience is still focused on auctions.

Even today if you were to type “Apple iPhone” into the search you’ll get 100,000 results, and you were left to find the best deal yourself. The structured data initiative promises to fix this, but it needs to happen faster. The single listing approach Amazon and most other marketplaces have is the only viable approach.

At the end of 2015 eBay added product reviews, previously eBay had seller reviews only. There are now over 20 million reviews. This is much more important than seller reviews in the post-auction era of eBay.

We think the slow growth is caused by major initiatives like structured data taking too long. eBay has millions of sellers, listing hundreds of millions of products, so the amount of work to clean them up is not to be discounted. However, auctions are quickly shrinking on eBay, leaving eBay to reinvent itself as soon as possible.

Not to mention that what fuels a lot of Amazon’s growth is Prime, with free and reliable shipping. Marketplace sellers are benefiting from this too by using Fulfillment by Amazon (FBA). Fulfillment is Amazon’s biggest advantage, something eBay is yet to try to tackle. For now, reinventing the website and mobile experience are key.

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Juozas "Joe" Kaziuk─Śnas

Founder of Marketplace Pulse, Joe wears multiple hats in the management of Marketplace Pulse, including writing most of the articles. Based in New York City. Advisor to other startups and entrepreneurs. Occasional speaker at conferences.

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