ChannelAdvisor Scot Wingo By Scot Wingo

eBay Q2 results – deep dive from a seller’s perspective.

Earlier today (July 16, 2015), eBay released their Q2 2015 results. These are their last results as a combined company with the PayPal/eBay separation coming July 17th.

First, here’s the eBay marketplace results dashboard with the results from Q2:

ebay_q2_results

The good…

The positives for the Q were:

  • US GMV growth accelerated slightly to 2%, up from Q1’s 1.9% pace.
  • International GMV growth accelerated to 8% y/y ex-fx which was an acceleration from Q1’s 7%.
  • Total GMV grew 6%, up from Q1’s 5%.
  • GMB grew 6% – GMB is GMV per buyer.  Note: this is the first time they have mentioned this so hard to know if this is good or bad, but on the call they said it was a highlight, so we’ll put it in the positive column.
  • Sold items grew 9.5% in Q2, an acceleration from Q1’s 9.0%
  • Fixed price listings represented 81% of GMV and grew 10% y/y ex-fx
  • eBay’s revenue for the MP exceeded expectations and grew 5% up from Q1’s 3%.

…and the bad

  • While US, Intl and total GMV trends improved, at 2%, 8% and 6%, they are well short of the 15% e-commerce growth rate and Amazon’s > 20% y/y growth rates.  This indicates that eBay is losing share of the total e-commerce wallet.
  • Active buyers only grew 6% – a slow down from Q1’s 8% growth in active buyers. More on this below.
  • The auction format decreased 12% y/y (not unexpected, but doesn’t help eBay get to e-commerce growth rates).

Active Buyer Analysis

The one metric we watch closely to get the best read on future growth at eBay is Active Buyers.  Buyers are the lifeblood of any marketplace because:

  • They are one of the key levers (buyers, conversion rates, AOV, mix, etc. are the others).
  • They are usually one of the biggest and most ‘control-able’ levers.
  • Buyers come to your platform because of a great customer experience (CX).  E-commerce CXs are driven by selection/assortment, value, convenience, etc.

Here’s the trend at eBay over the last 10 quarters:

ebay_q2_active_buyers

Looking back further than 2013 the metric is a little bit noisy (eBay reported in different ways and acquisitions moved it around), but based on the reported numbers this is the lowest this metric has been since we’ve been watching it.

On the conference call, CEO-elect, Devin Wenig spoke about Active Buyers and mentioned that the headwind is due to the SEO issues and the breach.

Up next, Q3….

In e-commerce, Q3 sets us up for the important holiday Q4 so we will be watching Q3 closely to look for further signs of deceleration, stabilization or acceleration at eBay.

This blog was written by Scot Wingo, Executive Chairman, ChannelAdvisor.

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