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eBay Gives Sellers Little Hope after Reporting Abysmal Quarter

eBay Marketplaces had an abysmal fourth quarter, growing GMV a mere 2%, and eBay didn’t give its sellers much incentive to stick it out in the short term: executives told Wall Street things were going to get worse before they got better.

eBay CEO John Donahoe also said eBay planned to build its own product catalog to overcome SEO problems, comparing it to the building of its Cassini search engine 5 years ago.

eBay identified several problems with Marketplaces in the fourth quarter, included poor exposure in search results (SEO), leading to a lack of new shoppers – as well as a segment of existing shoppers not returning or having difficulty resetting their passwords in the wake of eBay’s security breach last year.

eBay also said the rising dollar negatively impacted export volume in the U.S.

eBay Marketplaces gross merchandise volume (GMV) grew 2%, with the U.S. up 3% and International up 1%. Revenue grew to $2.3 billion. Marketplaces gained 2.9 million new buyers in the quarter and 14.9 million for the full year, up 11% to 155 million.

As to what it plans to do about the problems, eBay said, “We are taking decisive action to focus the business in an effort to simplify and speed up decision making while re-aligning the cost structure to create capacity to invest. We are prioritizing our resources towards our core shoppers and we are doubling down on areas of strength like our $2 billion GMV Deals business.”

More specifically, Donahoe revealed that eBay planned to create its own product catalog, but said it couldn’t be done overnight. He compared it to the rebuilding of eBay’s search engine (called Cassini) 5 years ago.

Google SEO is most attuned to what retailers have – structured data, Donahoe explained.

He also said Devin Wenig (head of eBay Marketplaces) was “ruthlessly focused” on rebuilding demand. In 2015, eBay Marketplaces will continue with a strong marketing spend consistent with the levels of 2014; “more focus on the top of the funnel”; will continue to build out SEO; and product, referencing the iPad as an example of a way eBay was trying to attract the infrequent or new user.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.