eBay has come out of the pandemic with their best quarter for 15 years. The eBay Q2 2020 earnings reveals buying was strong across most major markets in the marketplaces business, growing 29% and approximately 8 million more buyers to bring the annual active buyer base to 182 million.
Marketplace platforms delivered $2.7 billion of revenue, up 24% on an as-reported basis and up 26% on a FX-Neutral basis.
The growth figures are impressive and no where more so than in eBay’s original home, the US, where after multiple quarters of contraction eBay Q2 2020 earnings presentation reported 35% growth.
Adding as many buyers in a quarter as would normally take 18 months is a cracking result but the reality is that when the shops are closed buyers flock online. eBay’s challenge now will be to engage these new buyers as shops reopen around the world and keep them as happy eBay customers.
“While there are many accomplishments to be proud of, we are not satisfied with where we currently stand. The reality is that in the past few years, we’ve not executed to our full potential. New competitors have taken share because we neglected our core area of expertise. We focused on new areas that could not drive sustainable or profitable growth and to be candid we did not adapt quickly enough to the rapidly changing needs of our customers.
This leaves us with enormous untapped potential that we absolutely must capitalize on. This is what brought me back to eBay and it’s what the leadership team and I are committed to executing against. It will be a multiyear journey, but I believe we can drive long-term sustainable growth and generate significant value for shareholders.
Our mission is to become the best global marketplace and that’s been built with customers at the center with an acknowledgment of the driving force of our success has always been and must continue to be our leadership in technology. This is why the entire team at eBay is rallying around three key priorities to execute on the vision.:”
- To build compelling next gen experiences for our enthusiasts
- Become the partner of choice for our sellers
- Cultivate lifelong trusted buyer relationships
– Jamie Iannone, CEO, eBay
Returning to eBay’s core strengths
Jamie also set out a new focus on “on non-new and seasoned products” and maximise on eBay’s unique inventory. Many sellers will be heartened with a switch from plugging the latest tech products at knock down prices to highlighting everything from luxury items to parts and accessories and motors to fashion, electronics and collectibles.
“We plan to focus on non-new and seasoned products. Within these categories, we have unique inventory at scale, strong buyer consideration and loyal communities of buyers and sellers to connect through a common interests and passions, not just to buy and sell merchandise…
…Our plan is to focus technology efforts on the evolving needs of these passionate enthusiasts and we intend to accelerate growth in these categories in the coming years.
– Jamie Iannone, CEO, eBay
There will be many picking apart the eBay Q2 2020 earnings and the share price has dipped a little since they came out. That doesn’t really matter to those that make their living on the site. What’s more important is that the legacy of John Donahoe and his anointed replacement Devin Wenig has been swept aside and eBay has a new CEO. The pandemic has given eBay an unprecedented boost that can be capitalised on. eBay’s rep with sellers is pretty good compared to other venues based on their pandemic response and the influx of buyers (up 5% in the last quarter) are available to turn into regular engaged buyers.
A focus on the unique inventory on eBay has has been called on for years by sellers. Yes Promoted Listings are still gouging additional fees from sellers and eBay payments will present challenges, but if the underlying marketplace can ride the wave of the pandemic and come out stronger and once again relevant to consumers then we predict sellers will forgive eBay for the pain points and rejoice at accelerating sales.
One Response
The jump in active buyers is indeed impressive but not overly surprising with Covid-19 impacts, however, have I missed something with how eBay report active buyers as eBay reported 183m active buyers in their Q419 update but in Q120 they reported Q419 was only 174m?
Is eBay reporting their numbers differently as it would look like they have reset their numbers down in their Q120 statement onwards vs previous quarter numbers reported?
Q419 report, Q219 = 182m active buyers
Q220 report, Q219 = 173m active buyers