eBay’s Fourth Quarter and Full Year 2023 results are out and there are some interesting numbers for sellers on the marketplace for the fourth quarter. Revenue was driven by continued momentum in first-party advertising, expansion of eBay financial services offerings and the launch of eBay International Shipping. eBay were keen to emphasise that they have moved away from low ASP, low quality items with continued growth of focused category GMV and their drive to offer ecommerce for enthusiasts, which outpaced the remainder of the marketplace by about 6 points.
- Q4 Revenue was $2.6 billion, up 2% on an as-reported basis and up 3% on a FX-Neutral basis
- GMV was $18.6 billion, up 2% on an as-reported basis and nearly flat on an FX-Neutral basis
- eBay’s first-party advertising products delivered $368 million of revenue in the fourth quarter, up 33% on an as-reported basis and up 30% on an FX-Neutral basis
- Full Year Revenue was $10.1 billion, up 3% on an as-reported basis and up 4% on an FX-Neutral basis
- Full Year GMV was $73.2 billion, down 1% on an as-reported and FX-Neutral basis
- Focus categories for the Full Year GMV grew by nearly 4%, outpacing the remainder of eBay by roughly 7 points
The big takeaway from these numbers is the phenomenal growth in advertising revenue compared to flat GMV. There’s really no way to spin this in a positive light for sellers – The message is coming through loud and clear that if you don’t engage with advertising then your products are going to be disadvantaged compared to those sellers who do pay Promoted Listing fees.
What we do like that eBay are doing is their focus on ecommerce for enthusiasts, with different product categories becoming what the marketplace term as ‘Focus Categories’ – essentially a category where the experience is tailored for the enthusiast. the experience varies by category, so for some it will be authentication giving assurance that products are genuine and as described, while for other such as motor parts there’s AI powered predictive maintenance meaning that eBay know when it’s time for those maintaining their own vehicles to buy a replacement as part of routine motor maintenance.
Addressing the economy in Germany and the UK, where the consumer is more stretched in cost of living challenges, deals and value are key with programmes such as refurbished (which has seen double-digit growth) that are propping sales up. eBay are seeing a move from move some of the enthusiast buyers, to becoming mid-value buyers and say that the eBay value proposition is really resonating for those customers.
Specifically on the rise of platforms like Temu, eBay CEO Jamie Iannone says that eBay haven’t really seen a significant impact yet, and this is because of their enthusiast buyer in focus categories and lower reliance of low ASP, low quality goods, coupled with eBay being a destination site where enthusiast buyers start their search.
We really have a differentiated strategy, with what we’re doing with our focus categories and going after non-new in season, for the business. And years ago, we really moved away from the low ASP, low quality items on our marketplace.
And that hasn’t been a focus for us for many years now. So I think, that’s the first key differentiation I’d call out. The second is that, obviously some of the competition is spending a lot of money from a marketing standpoint in the marketplace. But one of the great benefits of eBay, is just the vast amount of organic traffic we have. The vast, vast part of our traffic either comes directly to the app or types in eBay.com.
– Jamie Iannone, CEO, eBay
Jamie went on to explain that eBay has one of the lowest customer acquisition costs of any platform, mainly driven by customer life time value – this all comes down to their ecommerce for enthusiasts strategy and that comes back to the focus categories which is why eBay have aligned their teams around the world to focus on verticals and why we’re seeing so many categories with differentiated offerings tailored to the type of buyer it will attract.
To summarise, eBay’s GMV is flat or slightly declining, their revenue growth is propped up by promoted listings, and their goals have shifted and those that will benefit are those that lean into the focus category products with the big three to jump in on being Motors Parts & Accessories, Refurbished, and Luxury
3 Responses
Promoted listings may be ebays downfall
In the long term
The fees and costs to our ebay business are becoming unsustainable
profits are less and less ,
Eventually ebays business model based ion an endless supply of seller’s will dry up
Jamie just wants more bang for his buck as a guy with so many shares. They do bury you unless you pay a kings ransom but they are pushing the prices up up up and frankly it makes the whole platform to expensive. I could not even find some Sonic games today they must be buried so far and they had Stealth fees on them.
It still has uses for unique items and I make sure their greedy little hands get as little as possible and do not promote them. I have been firing out collectors bits especially overseas for silly money this last year, but that is all very limited.
As for the day to day stuff bit pointless.
I read Vinted is apparently starting a pro option in the UK so that would hurt eBay as most people are kinda heading over their now anyway.
People complaining fees to high.
Chinese are happily paying them. It’s why eBay on boarded them these last 10 years don’t care about domestic.