Another Look at Wall Street's Assessment of eBay
By Ina Steiner
Last week we reviewed a report from Citi that shed light on how at least some on Wall Street view eBay, and today, we take a look at another report, this one from Susquehanna.
Naturally analysts are looking at eBay from a very different perspective than eBay sellers. In its report, Citi wrote, "(eBay) Management's execution of the turnaround of core Marketplace has been impressive." Similarly, Susquehanna stated that, "By now, it's well-known that the North American Marketplaces business has been turned around from its days of declines and severe e-commerce share losses."
A chart called "Recent eBay Marketplaces Improvements" explained how Susquehanna believes eBay is turning things around.
In the mid-2000's, analysts believed eBay couldn't handle the number of items for sale on the site after it adding "Stores" inventory to the "Core" platform. The CEO at the time Meg Whitman said, "The marketplace has been overwhelmed with identical, often poorly-priced items that have diluted the magic of the eBay experience."
However, two items on the "improvements" list show Susquehanna believes eBay has tackled this issue: The first item called "Improved item selection" - meaning more items for sale - is doable because of the third item called "Improved search/Cassini" - defined as "More relevant product search results."
What has this Wall Street firm most interested in eBay is its mobile reach. "The growth of mobile favors eBay's Marketplaces business and extends its reach advantage vs. traditional retailers. Further, our "app vs browser" analysis underscores eBay's sizable first-mover mobiel app edge, as its mobile app traffic is 50x larger than the median traditional retailer, and 11 of the 23 retailers in our sample don't have a mobile app presence at all."
The report also covers eBay's international push into BRIC markets (Brazil, Russia, India and China) and PayPal, of course.
"We are even more encouraged by recent user trends, as eBay added 3.9mn new users in 1Q:13 - the most added in a first quarter since 2005 - with the company specifically calling out new mobile users as a sizeable driver (+2.8mn total new users across Marketplaces and PayPal) in its user growth acceleration. In our view, these secular mobile tailwinds, ongoing benefits from the site redesign and surging new user growth (in part because of mobile) will enable eBay to continue to put up strong Marketplaces growth - and begin taking share in the North American e-commerce market."
With eBay reporting second quarter earnings on Wednesday afternoon, Wall Street will be looking to see if the "impressive turnaround" of eBay's core Marketplace continues to impress.
About the author:
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 firstname.lastname@example.org.
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