eBay Q3 2013 Results (from a seller’s perspective)

October 17, 2013

ChannelAdvisor Scot Wingo By Scot Wingo

Yesterday, October 17, 2013, eBay announced their 2013 Q3 results.  Long-time readers know the drill, but if you are new, we always take the results and parse through them focusing on a) the marketplace part of the business and b) those metrics that we feel are meaningful and actionable for sellers and retailers. Note that I do not cover the PayPal, BML or Enterprise/GSI parts of the ‘eBay Inc’ business.

Overview of eBay’s Q3 marketplace results

comScore’s Q3 e-commerce growth rate came in at 13.2%   eBay has a stated goal of growing faster than e-commerce so 13.2% is the bar that has been set.

Q3 Highlights:

  • Active users (on the marketplace) for the Q came in at 123.6m, representing 14% y/y growth – keeping the pace from Q2 (also 14%). eBay added 15.3m active buyers y/y and 3.9m sequentially.
  • 36% of those new users (2.4m) came from eBay’s Mobile efforts
  • US GMV came in at 15% y/y growth, $7.33b (ahead of overall e-commerce)
  • Fixed price grew 18% y/y (well ahead of overall e-commerce) – FP hit a new high-water mark of 71% of transactions
  • >50% of transactions featured free shipping
  • Intl was 52% vs. 48% for US
  • Global Shipping Program (GSP) is now avail in 37 countries
  • eBay marketplace has > 500m listings globally
  • Top Rated Sellers (TRS) same store sales (SSS) were up 17% (greater than e-commerce) and TRS sales now represent 46% of sales
  • (new metric!) eBay revealed that 22% of their ECV (all of their transactions across eBay MP, PayPal and GSI/EE – kind of super-GMV) are cross-border-trade (CBT in e-comm speak)
  • Mobile ECV grew 75% y/y (a whopping > 5X the rate of desktop e-commerce as reported by comScore)
  • eBay launched 34 retailers/brands on the platform in Q3

Q3 Lowlights:

  • International GMV grew a sluggish 12% y/y.
  • On the call, eBay was negative/conservative on q4: “eBay experienced deterioration in the US e-commerce market”, “US e-commerce softened considerably”. Wall St. did not like the guidance that eBay put forth which was $4.5b-4.6b – 14% y/y growth at the mid-point.

Updated Q3 dashboard:

Here are the key metrics from the quarter: (click to enlarge)

Ebay_q3_dashboard

 

As you can see from the table, eBay’s results were largely in-line/ahead of expectations and bode well for US sellers. As mentioned in highlights/lowlights, eBay did say they are concerned about the US e-commerce growth rate, specifically around their Q4 forecast.

 

eBay Category Details

Unlike Amazon who is very closed with their category data, eBay releases detailed category metrics every quarter that we analyze for you.  Here is a chart that lists each category from largest to smallest indexed by their Q3 2013 GMV.

Ebay_q3_cats_size

8 categories are in the $1B/Q club – with B+I staying in by the skin of their teeth.

The next chart looks at each category by their y/y growth rate (more relevant in our world than sequential Q->Q growth).  The green indicates the category grew faster than e-commerce, the yellow is in-line and the red is substantially lower than e-commerce.

Ebay_q3_cats_by_size

 

Outperforming categories

  • Cell phones – eBay continues to do well in this category.  With new iPhones and Samsung devices hitting the market, this category plays two trends:  First, a lot of consumers sell their old phone (direct or through partner) which creates a vibrant used/last-gen market.  Second, with hard-to-find items (e.g. gold iPhone 5S), eBay wins as well.  Both of these factors delivered 28% growth (>2X e-commerce) in the cell phone category.
  • P+A is growing at 20% y/y.  In the ChannelAdvisor SSS data for P+A we saw a deceleration through the Q (26.6% in July to 14.4% in Sept) so it was good to see this category maintain it’s above e-commerce performance.
  • B+I – we are seeing a huge sea change in how businesses buy. It’s great to see B+I continue this > e-commerce growth rate.
  • Health, CSA and EE also grew faster than e-commerce.

In-line categories

  • Both Jewelry and coins slowed down significantly in Q3 from Q2 – gold prices are down which does tend to weigh on these categories.
  • Sports – last Q sports grew 11% and it slowed to 9% in Q3.

Underperfoming categories

  • BMV, video games,  vehicles are all categories that have historically be structurally challenged, so no surprises there.

Conclusions

Q3 was another mixed quarter for the eBay marketplace. In Q2, we had EU/KR softness and US was strong and this Q they seem to have flipped. Amazon announces their Q3 on Oct 24 and it will be interesting to see if they talk about softness so we can see if it’s somewhat isolated to eBay or more widespread/macro.  Stay tuned to sister site AmazonStrategies for a preview and similar analysis of how they performed.

Once we see how Amazon’s Q3 performed, we will have a better view of what changes, if any, you should make heading into Q4 to minimize risk and maximise up-side.

Scot Wingo wrote this blog post. I am CEO of ChannelAdvisor where eBay is an investor.