|Wed July 18 2007 21:47:58|
eBay Listings Down, GMV, Revenues Up in Marketplaces
By: Ina Steiner
This is a follow-up to my previous blog post. eBay explained the fact that listings are down yet GMV is up in its Marketplaces business during its analyst conference call on Wednesday afternoon. eBay did not attribute the listings decline to China, rather, it said that globally, across the board, listings declined 6 percent year-over-year. The explanation can be found on slide #8 shown in the investor call, which should remain available online for at least a few days.
In the second quarter 2006, listings were up 35% year-over-year to 596 million; in the second quarter 2007, listings were down 6% year-over-year to 559 million. In Q2-2007, the US accounted for an 8% decline, international accounted for a 5% decline.
The 6 percent decline in total listings is broken down as follows: a 2 percent decline in Core, and a 25 percent decline in Store listings. When eBay raised Store fees last summer, it said it wanted sellers to shift listings from Store to Core, so the decline in Store listings is not a surprise. But the 2 percent decline in Core indicates sellers did not rush to list on Core.
eBay's own Trust & Safety initiatives may have contributed to some of the decline in listings: its anti-counterfeiting initiative; cross-border trading restrictions; and the crackdown on lowest 2% (1%?) of sellers, all reduced the ability of sellers to list on the site.
What's interesting is that eBay said ASP and conversion rates are improved. In some ways, this makes sense: in a supply and demand marketplace, less supply with the same amount of demand usually means higher prices. But I'm not hearing sellers crowing about great ASPs and conversion rates. (And, after all, how much could iPhone sales have contributed to higher average selling prices?)
Bob Swan said, "The gap between listings growth and GMV growth is driven primarily by improved core Average Selling Prices and conversion rates. FX drove the remaining 3 points to total GMV growth of 12%." Note: FX is currency exchange rate.
On the slide, 4 of the 6 percent listing decline is attributed to "core vs. store inventory mix." The other two points are due to "core conversion rate and ASP." (Which is puzzling, can anyone figure out how improved core conversion rate and ASPs could contribute to a decline in listings?) "Core conversion rate and ASP" also contribute to the increase in GMV year-over year by about 9 percent (the logic does work going that way).
Then regarding revenue growth, Swan said, "The gap between revenue growth and GMV growth is driven by several factors. First, continued strength in our non-GMV businesses, such as Shopping.com, Rent.com, classifieds, and advertising, is contributing 4 points of growth."
Swan also cited the recently acquired StubHub tickets business, "which features a higher take rate than our eBay platform, as well as our joint ventures in China and Taiwan, where we're no longer recognizing local GMV, because we now hold a minority interest, drove 4 points in the difference."
Swan said the format of the vehicles business has been shifting. "While GMV for vehicles is slowing, we are monetizing this business through other platforms such as our classifieds business, and our local motors format,....These factors combine to account for 3 points of the gap between revenue and GMV growth. Pricing actions we've taken in the last 12 months drove the remaining 2 points of growth."
So as far as squeezing more revenue out of GMV business, this accounts for 2 percent of the difference between the 26 percent revenue growth and 12 percent GMV growth. (Removing the effect of the currency exchange rate brings GMV growth to 9 percent.)