How is eBay still going?


“How is eBay still going?” wondered a colleague this morning, after seeing that the online marketplace company had reported quarterly earnings overnight.

Not only that, but revenues were 14% higher.

And the shares? Well, the eBay Inc stock price is fresh from hitting an all-time high in recent weeks.

Considering that Facebook Marketplace now seems to be the place where everyone sells their unwanted goods, Esty is where crafty sorts sell their jewellery and upcycled furniture, and the second-hand clothing market is now dominated by a host of new specialist platforms, from Depop and Thrifify to Shpock and Vented, it is surprising that there’s any space left for eBay.

Having said that, and I don’t know if it’s just my Google search algorithm and aversion to one ubiquitous online retailer, but I get directed to its auction site quite often.

Looking at my purchase history for this year, there’s a guinea pig hutch, replacement slats for a garden bench, a 1960s Russian watch and an odd-sized camera lens case – so I suppose the site does have its niche uses.

And as the results showed overnight, high-value buyers (not me!) buying more than six times a year and spending $800 or more are 20% of the base and represent 75% of the gross merchandise volume (GMV) – with the added twist that CEO Jamie Iannone is making progress with his transformation plan.

Analysts at UBS agreed, but said there were a “lot of moving pieces” in the results and looking forward to the rest of the year, eBay will face “mobility & customer attrition headwinds” – ie when people can go out more and buy from bricks and mortar shops.

Revenue for the past quarter was better than expected on the back of stronger advertising and the new payments system, while UBS noted that Q3 guidance of 6%-8% top-line growth is based on the premise that the strength continues as the company expands its offerings with more advertising options for sellers, and more sellers adopting the payments option, despite the projected low-to-mid teen decline in volumes.

The analysts said eBay’s new authentication tool is one that bulls could point to, as a nascent addition and especially with the importance of trust for buyers purchasing high-value items on the platform.

While Iannone and the board are expected to remain aggressive in buying back shares, UBS said there is underlying uncertainty, “particularly when it laps the top line growth driven by the rollout of managed payments and mobility improves (as and when that happens)”.

But as my guinea pig-to-Russian watch buying record shows, the sheer breadth of options on the site and improving tech tools may ensure the cockroach-like survival skills of eBay for years to come – though it doesn’t quite explain the sky-high share price.


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