Still, analysts and industry observers viewed eBay's earnings positively. Q2 earnings beat Wall Street's expectations, and eBay said it now expects sales in the third quarter to be between $2.29 billion and $2.37 billion.

eBay Inc. said its gross merchandise volume, which is the value of all goods sold on the site, fell 18% to $18.55 billion in the second quarter of 2022. The online marketplace said it ended Q2 with 138 million active buyers, a 12% decline from a year earlier.

Still, analysts and industry observers viewed eBay’s earnings positively. Q2 earnings beat Wall Street’s expectations, and eBay said it now expects sales in the third quarter to be between $2.29 billion and $2.37 billion. That’s higher than the average analyst projection of $2.3 billion in the quarter that ends in September.

EBay said the stronger-than-expected earnings were the result of its emphasis on its so-called focus category strategy, which involves selling higher-end products such as watches and sneakers. In June, the company unveiled the 31,000-square-foot EBay Vault, a temperature-controlled facility where collectors can store valuables, monitor their market value and sell them to other buyers. The move pits EBay against such sites as The RealReal Inc., a members-only consignment shop for luxury goods

“We are seeing significant outperformance in focus categories globally,” said eBay Chief Executive Jamie Iannone in a call with analysts.

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EBay ranks No. 5 in the 2022 Digital Commerce 360 Online Marketplaces Database

eBay expects a further decline in GMV

Despite the focus-categories strategy’s success, the company lowered its full-year guidance for GMV to between $72.7 billion and $74.7 billion. That’s down from the $73.2 billion to $75.2 billion it had forecast earlier.

The marketplace attributed the GMV decline to problems in Europe, noting that U.S. GMV grew 15% compared to Q2 of 2019, while international GMV was down 3% over the same time period.

“European markets have been more meaningfully impacted given their proximity to (the war in) Ukraine,” Stephen Priest, eBay’s chief financial officer, told analysts.

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Focus on focus categories

The idea behind the focus categories is to increase revenue from buyers of collectibles, who are seen as more frequent shoppers than eBay’s traditional customers. eBay has begun offering authentication services for items such as trading cards and jewelry, hoping to become seen as the safest place for what it calls “enthusiast buyers” to pursue their passions.

“The vast majority of our enthusiast buyers shop in focus categories, and their spending levels remain above $3,000 per year,” Iannone told analysts.

Those high spending levels also drove eBay’s acquisition in Q2 of KnownOrigin. KnownOrigin is a non-fungible token (NFT) platform that enables artists and collectors to create, buy and resell NFTs via blockchain-supported transactions.

Industry observers have voiced approval of the strategy.

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Earlier this year, we saw eBay focus in on the ‘enthusiast buyers’ that represent a significant amount of their business,” Suzi Tripp, vice president of insights at consulting firm Brooks Bell, told Digital Commerce 360. “A focus on luxury items and addressing buyers’ concerns about authenticity by tapping into expert verification and authenticity guarantees have served eBay well this quarter. They know who their most influential segments are and are relentlessly working to create experiences that will keep them coming back for more.”

EBay told analysts that it has 17 million enthusiast buyers, which it defines as buyers with at least six purchase days and more than $800 in annual spend.

Changes at eBay 

In other news from the second quarter of 2022, eBay: 

  • eBay joined an investment consortium led by The Chernin Group (TCG), which made a strategic investment in Funko. As part of this investment, Funko and eBay are entering into a commercial agreement. Through it, eBay will become the preferred secondary marketplace for Funko. The companies will partner on creating exclusive product releases.
  • eBay announced it will close GittiGidiyor, the company’s marketplace business in Turkey. The closure will not have a material impact on eBay’s revenue and operating income going forward, the company said.
  • The company’s total advertising offerings generated approximately $275 million in revenue in the second quarter. That represents roughly 1.5% of GMV.

How is eBay doing financially?  

In the second quarter ended June 30, eBay reported: 

  • EBay revenue was $2.4 billion. That’s down 9% on an as-reported basis and down 6% on a foreign exchange (FX) neutral basis.
  • Gross merchandise volume (GMV) of $18.5 billion. That’s down 18% on an as-reported basis and down 14% on an FX-neutral basis.
  • GAAP net loss from continuing operations of $536 million.

Percentage changes may not align exactly with dollar figures due to rounding.

Bloomberg News contributed to this report.

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