eBay Marketplaces GMV grew 4% in the first quarter year-over-year accounting for foreign currency (“FX-neutral”), company executives said during an earnings conference call with Wall Street analysts on Tuesday. Marketplace revenue was up 3% on an FX-Neutral basis during the quarter.
While auction format listings declined 20% and the company continues to face challenges, eBay will launch new user experiences and new categories, and it will test television and outdoor marketing this quarter. Without revealing any details, eBay CEO Devin Wenig said, “you’re going to see us start to go on the offense and launch a couple of new categories soon.”
He said eBay would advertise “a little” on TV, but said eBay was not materially increasing marketing spend – rather, it will reallocate marketing spend. “I don’t want to do any significant brand work until the product has moved on,” Wenig said. “I don’t want to spend a lot of money to bring people in to a user experience that is changing.”
Regarding Marketplaces, eBay CFO Scott Schenkel told analysts, “While we face the ongoing challenges of SEO, the continued impact of mobile headwinds, and the pressure on our C2C business (consumer to consumer), we are encouraged by delivering stable quarter-over-quarter growth.”
Wenig played up the company’s efforts to offer a product catalog through its Structured Data initiative. He said that while SEO traffic from non-structured data pages continues to decline, eBay has been able to offset much of that decline by shifting traffic to new Structured Data pages, which now represent 10% of total SEO traffic, with higher overall conversion.
Thanks to structured data, eBay has been able to offer improved user experiences, Wenig said. Great deals had been hard to find – the new browse paths can show shoppers what is unique about eBay and hit consumers right between the eyes so they can see why they should shop eBay. “Over next two quarters, we expect to make significant progress on launching new user experiences,” he said.
Schenkel said eBay tested promotions to see what was most effective in driving customer lifetime value. “We ran a number of different promotions in Q1 to test the efficacy of our marketing spend.”
eBay Marketplace Performance in a Nutshell
According to eBay’s quarterly earnings press release, here’s how the eBay Marketplace performed in the first quarter in a nutshell:
“The Marketplace platforms delivered $19.6 billion of GMV and $1.8 billion in revenue for the first quarter. Marketplace revenue was up 3% on an FX-Neutral basis and flat year over year on an as-reported basis, driven by stable GMV growth and strong performance in Marketing Services & Other.”
Note that the company as a whole (including StubHub and Classifieds) grew GMV 5% on a foreign exchange neutral basis.
Active Buyers up 4 Percent
eBay said it added over 800,000 buyers in the first quarter of 2016, ending the quarter with 162 million active buyers (trailing 12 months). That was 4% higher than the first quarter of 2015.
Growth in retained and reactivated buyers remained stable, the company said. However, eBay faces “continued SEO headwinds” when it comes to acquiring new buyers.
Wenig said “new buyers will come from social, they’ll come from search, they’ll come if we do “top of the funnel” marketing like we’re testing now on TV and outdoor and other places.”
Wenig said eBay continues to build upon its efforts to diversify traffic. He said eBay recently became the first brand to test audience-match campaign on Snapchat and said it has seen great engagement, and he mentioned eBay’s pilot integration with Facebook Messenger.
Auctions GMV Falls 20 Percent
The Auction format declined 20% year-over-year in the first quarter. An analyst asked if there was an end in sight – a point at which auctions could become stable.
Schenkel called it a “multi-year deceleration” and said the inflection point would be largely determined by eBay’s seller base and to some extent eBay’s buyer base. He sees it as a function of how users find price guidance. “As we get down to elements of price discovery that aren’t facilitated by either online research or a catalog, I think we’ll start to see that tail off, decelerate into something a bit more stable, or at least that’s what we believe.”
The earnings release and post-earnings call and accompanying slides revealed some additional interesting points, including the following:
FX-Neutral global Fixed Price format grew 11% Y/Y in the first quarter.
Volume purchased by US buyers decelerated in Q1 quarter-over-quarter to 5%.
In Q1, eBay continued to increase the amount of inventory on its platforms, with over 900 million live listings available at any time.
eBay will release a significant new app release very soon.
eBay had previously been on a strategic mission to go after “BRIC” countries – Brazil, Russia, India, China. When asked by an analyst about Russia, Wenig called it a “disaster” due to sanctions and the currency devaluation. But he said eBay was maintaining its presence in the hopes of it turning around – “we have laid the railroad tracks.”
The two eBay executives were positive but measured in their responses to analysts’ questions.
Schenkel told analysts, “It will take time for the green shoots we are seeing to start materially impacting the business.”
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