eBay Q1 2015 Results I/II – eBay Reveals Post-Split Strategy

April 27, 2015

ChannelAdvisor Scot Wingo By Scot Wingo

This is Part I of II part coverage of eBay’s Q1 results.  In their conference call with Wall St., eBay revealed new details about their post-PayPal split strategy and we though it was important to share this with sellers as it could have serious ramifications for 2H15 and beyond.

eBay Marketplace Post Split Strategy Summary

In eBay’s Q1 2015 call, CEO elect of eBay Marketplaces gave a first look at eBay’s new post-split strategy.  We think the new strategy will be extremely interesting to sellers, so we are leading with that before we get into the usual seller-oriented analysis of the Q1 results.

Wenig started by outlining post-split eBay’s strategy as three pillars:

  1. Building a robust commerce platform
  2. Engaging the core buyer and seller segments
  3. Creating exceptional product and brand experiences

Wenig finished by saying that “we intend to play our game, no one else’s and focus where eBay can win.”

He then went on to expand on what each of those three pillars are and gave examples:

Building a robust commerce platform:

This refers to the eBay marketplace technology platform and its features.  Wenig announced a key initiative within this pillar – eBay is going to move to a structured data marketplace.  He talked about this being a long-term multi-year effort that won’t be easy, but is critical to improve both the SEO problems eBay has with Google as well as improving the user experience.

Engaging the core buyer and seller segments:

Here Wenig gave some new perspectives on where eBay believes it can win.

  • Core buyer – Wenig said that eBay’s core buyer are treasure seekers focused on finding interesting and unique items and value hunters.
  • Core seller – small, medium sized sellers and brands.  eBay wants a renewed focus on the individual seller as well.  Wenig said that these segments represent 70% of the global retail market.
  • High touch intermediation – Wenig mentioned that they are going to start doing ‘high touch intermediation’ for individual sellers.
  • Category Experiences – Wenig said that there would be more category specific experiences.

Creating exceptional product and brand experiences

This was the least flushed out of the pillars.  Wenig pointed to the new iPad app and live auctions as two examples of this pillar.

Thoughts on the new direction 

We think sellers will appreciate the new strategy revelations from Wenig.  Let’s look at each of these in detail:

  • Catalog based marketplace – This is how Amazon and other retailer-based marketplaces are setup so most sellers are familiar.  eBay did say they will be the first marketplace to be category based which didn’t make much sense.  Sellers I’ve talked with were a big skeptical about eBay’s commitment to building a catalog.  That’s because eBay has attempted this 2-3 times in the past and each time has determined that it doesn’t perform as well as the current system and went back to 1997 eBay’s listing-based approach.
  • Core buyers – It’s good to hear eBay is sharpening its focus, but it’s not entirely clear what a treasure hunter is and how that compares to a value shopper.  One example I’ve heard sellers use is they are confused why eBay is focusing on bringing Sotheby’s auctions and high-end fashion brands onto the platform if eBay is focusing on value shoppers.
  • Core sellers – eBay said they are focusing on individuals, small and medium size sellers as well as brands.  The only group that currently sells on the platform that is not listed as a ‘core seller’ are large sellers.   I’m not sure if this was intentional or not, so we will be eagerly looking for more information on what this means for large sellers and retailers on the platform.
  • Category experiences – This makes a lot of sense.  Based on our SSS data, the one area that is growing faster than e-commerce within eBay is eBay Motors Parts and Accessories which has a very specific category experience that creates a unique buying experience only available on eBay.

eBay announced that the split is happening in Q3 (Jul-Sept) and we’ll continue to monitor the messaging around their post-split strategy.


This blog was written by Scot Wingo, CEO, ChannelAdvisor.