U.S. marketplace sales reached $7.3 billion in the first quarter.
Katie Evans , Managing Editor, International Research
The value of merchandise sold on eBay Inc.’s U.S. marketplace increased nearly 16% year over year in the first quarter to reach $7.36 billion from $6.37 billion a year earlier, eBay said today. Globally, the value of merchandise sold on eBay’s marketplaces increased 13% year over year, reaching $18.33 billion in the first quarter compared with $16.21 billion a year earlier. The company’s net Q1 revenue increased 14% compared with the same period last year.
"We had a strong first quarter, with accelerating user growth across both marketplaces and PayPal, and with GSI enabling their retail clients to grow faster than e-commerce," says John Donahoe, eBay president and CEO. “Technology is creating a commerce revolution, and we are in the forefront with strong mobile leadership and a focus on helping retailers and brands engage consumers anytime, anywhere." PayPal is eBay’s payment service. GSI Commerce is a unit of eBay that provides e-commerce technology and services to hundreds of retailers.
New mobile users helped drive growth, eBay says. EBay’s apps, including those for marketplaces and PayPal, have been downloaded 162 million times since the first was launched third quarter of 2008. EBay gained approximately 2.8 million new customers in Q1 through mobile devices, helping driving double-digit growth in active mobile users at both PayPal and marketplaces, eBay says.
EBay’s U.S. marketplace sales growth outpaced international. The value of goods sold on eBay’s international marketplaces grew 11% to $10.96 billion compared to $9.84 billion a year earlier. EBay announced at its Analyst Day late last month that it plans to put a strong focus on growing international sales, particularly in emerging markets such as Brazil, Russia, India and China, or BRIC markets. EBay said it expects BRIC and other emerging markets where eBay doesn’t have a local presence to account for as much as 25% of eBay marketplaces' global active users and 12% of its global sales by 2015. In 2012, consumers in those countries spent $3.2 billion on eBay marketplaces, 4.3% of eBay’s global gross merchandise value. EBay forecasts the regions will drive as much as 40% of its new active users over the next three years.
Donahoe told analysts that the Russian-language site eBay launched in March is off to a good start. "I will say the first couple of weeks since our Russian site launch, we’ve had strong acceleration of new users," Donahoe said, according to a transcript provided by SeekingAlpha. "And those new users are beginning to buy. So still early days. It only launched a couple of weeks ago, but it’s a market that we like a lot."
For the first quarter ending March 31, eBay reported:
EBay released its earnings report after stock markets closed this afternoon. In after-hours trading soon after the release the company’s stock was down nearly 3%.
“The eBay marketplace has improved and is now growing at average e-commerce rates,” Colin Sebastian, an analyst for private equity firm Robert W. Baird & Co writes in his analysis on eBay’s earnings. Online retail sales increased 15.8% in 2012 over the prior year, according to the U.S. Commerce Department. Indeed, eBay did much to bring buyers back to its marketplace last year, including redesigning its site, making it cleaner and easier to navigate, updating its logo, and introducing new buyer protections.
As part of those changes, eBay added a “My feed” section that shows shoppers products it thinks they may like based on their buying and search histories, as well as interests that eBay prompts them to share when they first visit ebay.com/feed. That move is one of a series of recent steps by eBay to take on Amazon.com Inc. more aggressively, as Amazon has long been known to excel at personalization.
EBay also came out with new fee structures and better seller protections earlier this year in another attempt to gain an edge over its biggest rival. That announcement aimed to make the case that it’s a better deal to sell on eBay than Amazon.com and drove home the message that eBay doesn’t sell items on its own like Amazon, so it will never compete with sellers. “EBay’s core marketplace faces strong competition from Amazon, which is growing at a faster rate,” Sebastian says in his report. “However eBay does have a different model and the customer base does not entirely overlap with Amazon.”
Sebastian also echoes Donahoe’s statements that mobile commerce is one of eBay’s strong points. “EBay is an early leader in mobile commerce,” Baird says. “Along with PayPal, the eBay marketplace is in an advantaged position to benefit from rapid growth in mobile, leveraging recent acquisitions that connect local store inventory with eBay’s robust online platform.” Those acquisitions include Milo, which shows consumers products available in local stores and RedLaser, a mobile price-comparison app.
Scot Wingo, a long time eBay observer and CEO of ChannelAdvisor, which helps merchants sell on eBay and Amazon as well as through other online channels, notes on his blog that the bulk of eBay’s new active users in Q1 first accessed eBay from mobile devices. EBay added 3.9 million new users between Q4 and Q1, and 2.8 million came from mobile, he says. In other words 1.1 million new users or 28% were computer users and 2.8 million or 72% came from mobile devices. “That's quite impressive, and hopefully if eBay can keep these new buyers engaged, they will increase their buying over the next year,” Wingo says
PayPal, meanwhile, which has been one of eBay’s strongest businesses in recent years, is also poised for growth, Sebastian says. “Benefiting from strong network effects and an early leadership position, PayPal is, in our view, a juggernaut in online payments, with a defensible position in an attractive and fast-growing market,” he says. Sebastian adds that steps eBay has taken to expand PayPal transactions, such as adding PayPal as a payment option at checkout in stores, are moving forward. Consumers can pay using PayPal in 20,000 stores, he says.