EBay Inc. is yet another example of an ecommerce merchant benefiting from more consumers shopping online as a result of the coronavirus pandemic.
The gross value of goods sold on eBay’s U.S. marketplace grew 34.6% to $10.49 billion from $7.79 billion in the second quarter ended June 30, the company reported Tuesday. Global GMV reached $27.13 billion in Q2 2020 from $21.48 billion in the same period of 2019.
Global GMV, which includes its U.S. and international marketplaces, grew 26.3%—the highest quarterly growth rate for the marketplace in 15 years. In fact, U.S. GMV has declined every quarter since Q4 2018 and global GMV only increased twice: by 0.9% in Q4 2018 and 1.4% in Q1 2020.
EBay is ranked No. 5 in the 2020 Digital Commerce 360 Online Marketplaces Database.
For the first 6 months of the year, total GMV reached $48.39 billion, up 12.4% from $43.05 billion. U.S. GMV was $18.12 billion, up 15.3% from $15.71 billion over the same period in 2019.
“The growth in volume was primarily driven by consumer behavioral shift to online shopping, which brought more buyers to the platform, who on average spend more per buyer than in the past,” interim chief financial officer Andy Cring said on a call with investors discussing the results, according to a SeekingAlpha transcript. 80% of GMV in the quarter came from increased purchase frequency in existing buyers, and the remaining growth came from new buyers.
Since the coronavirus pandemic hit the U.S. in March, eBay has seen shifts in its business from buyers and sellers. There were 182 million active buyers on eBay’s marketplaces in Q2 2020, up from 174 million in Q1 and 173 million in Q2 2019. To put growth in context, the 8 million new buyers eBay added in Q2 compared with Q1 is higher than the buyers added in the last six quarters combined.
The marketplace says web traffic, new customers, conversion rates, transactions and GMV all increased as a result of stay-at-home orders and evolving consumer behavior. Sales in these categories grew the most since the pandemic: home and garden, electronics, fashion, auto parts and collectibles.
Sales growth in countries like Germany and Italy peaked in April and have since tapered off because the height of the virus occurred in those regions during the spring months, the company says. In the U.S. where COVID-19 infections are still spreading, growth has been steady through July.
Looking forward, eBay projects total GMV growth in the high-teens in Q3 and mid-teens for the full year. The marketplace did not provide specific projections for the U.S.; however, it indicated that U.S. GMV is likely to remain strong in the coming months and overall GMV growth is slowing down because some of its international markets are going back to pre-pandemic growth.
Marketplace strategy
Executives pointed to three core initiatives this year: growing eBay’s consumer-to-consumer business and “non-new” products, adding more small business sellers and retaining new customers.
To build its seller base, eBay is working on making the onboarding process “extremely easy” by simplifying registration and other steps in the process. It’s also investing in more tools for sellers. To retain buyers, the marketplace is investing in its mobile app, where it says the majority of transactions occur. Its focus is to bring more millennial customers to the marketplace.
Lastly, eBay plans to refocus on “non-new and seasoned” products, or used goods, by creating communities within verticals, like sneakers, where buyers and sellers have common interests and are typically passionate about the products. Executives recognize this is an area eBay used to thrive in, and that it’s an important facet of growth for eBay’s future, they say.
“This is an important focus for us as approximately half of our volume in major markets comes from these products, and the camp of these categories is expanding as more offline inventory transitions online,” CEO Jaimie Iannone said on the call. Popular “non-new” product categories on eBay include luxury items, motors, parts and accessories, fashion, electronics, and collectibles.
This renewed focus may also stem from the growth in niche marketplaces (or sites that sell items in a particular vertical) that are now direct competitors to eBay. In the Digital Commerce 360 Online Marketplaces Top 100 ranking, for example, 47 sell products from a particular merchandise category, such as apparel or home goods. The 47 niche marketplaces collectively grew GMV 23.6% to $38.76 billion in 2019, faster than the 18.0% growth of the full Top 100 marketplaces.
What’s more, consumers are shopping on niche marketplaces: 29% of online shoppers purchased from a specialty marketplace that focused on a unique category in the past year, according to a Digital Commerce 360 and Bizrate Insights survey of 1,000 U.S. consumers in May 2020.
“There are certain areas we let niche competitors take business away from eBay that should be done on eBay, and it shows you the potential we have on eBay if we really focus our technology effort in those areas,” Iannone said.
In the second quarter ended June 30, eBay also reports:
- Net revenue for eBay’s global marketplaces, which comes from the fees paid by eBay’s sellers, increased 18.2% to $2.86 billion from $2.42 billion in Q2 2019.
- Net income was $746 million, up from $402 million.
For the first six months of the year, eBay reports:
- Net revenue of $5.24 million, up 8.3% from $4.84 million in the same period a year ago.
- Net income of $4.16 billion, up from $920 million a year ago.
Percentage changes may not align exactly with dollar figures due to rounding.