eBay’s Q2 2013 Results (from a seller’s perspective)

July 18, 2013

ChannelAdvisor Scot Wingo By Scot Wingo

Yesterday, July 17, 2013, eBay announced their 2013 Q2 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 Q2 results

While comScore hasn’t come out with their Q2 report for e-commerce growth yet, their April/May US e-commerce growth came in at 16%.    eBay has a stated goal of growing faster than e-commerce so 16% is the bar that has been set.

Q2 Highlights:

  • Active users (on the marketplace) for the Q came in at 119.7m, representing 14% y/y growth, another acceleration from Q1’s 13%
  • 30% of those new users came from eBay’s Mobile efforts
  • US GMV came in at 16% y/y growth, $7.33b (in-line with overall e-commerce)
  • Fixed price grew 18% y/y (well ahead of overall e-commerce)
  • 50% of transactions featured free shipping
  • Fixed-price hit a high-water mark of 69% of transactions
  • Category specific: The cell phone category was on fire – growing at 38% y/y
  • Category specific: P+A (auto parts and accessories) was another top performer coming in at 19%
  • Category specific: eBay now has 8 $b categories – there’s a new addition to the $Billion category club – see below for details.
  • eBay added 8 more countries to their awesome global shipping program, bringing the total up to 36.

Q2 Lowlights:

  • International GMV grew a tepid 10% y/y, the slowest rate in quite a while.  eBay cited headwinds from Europe and Korea along with FX headwinds from a strong dollar.
  • Total GMV grew slower than e-commerce at 13% y/y (driven by the international piece, not US)
  • Category specific: the music instrument, BMV (media) and video game categories were essentially flat in the 2-4% growth range.
  • eBay lowered their guidance for Q3/FY13 to reflect the macro economic pressure they see in EU and KR.

Updated Q2 dashboard:

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

Ebay_q2_results_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, International was a headwind.  On the conference call, eBay specifically called out Korea and the UK.  Unfortunately eBay does not break out details for each of the regions.

Some other metrics of note from the conference call:

  • Fixed price is now 67% of GMV and grew 18%
  • Auctions grew 1% y/y, now only 24% of sales (rest is vehicles)
  • Top Rated Sellers (TRS or eTRS) were 45% of eBay’s US GMV and their SSS was up a whopping 22%

 

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 Q2 2013 GMV.

Ebay_q2_categories_by_size.jpg

 

A couple of things to note in the above:

  • There are now  8 categories (in yellow) with quarterly GMV at or over $1B.  We are excited to welcome the rarely discussed, but very much on-fire category of B+I (B2B items – essentially industrial supplies).  This category is interesting because Amazon is going after it hard as well (AmazonSupply.com) and both companies are benefiting as it comes online in a big way.
  • H+G continued its reign as the king of eBay categories, coming in at $2.9b for the Q – and accelerated to 12% y/y growth from Q1’s 10%.
  • Another exciting move – P+A leapfrogged CSA to be the number two category
  • P+A (auto parts) is on fire with 19% y/y growth.
  • CSA grew decently at 14% y/y, making it not only a top tier scale category, but a strong grower as well – kind of the ‘magic quadrant’ for an eBay category.

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_q2_categories_by_growthrate

Outperforming categories

  • Cell phones – eBay is doing quite well in this category.  eBay offers a plethora of inexpensive accessories, refurbed phones and new phones that are hard to find.  Wow, 38%!
  • P+A lept ahead of CSA because it is growing at 19% y/y.  It’s great to see this pick up, I suspect Q1 was muted due to weather.
  • B+I – we are seeing a huge sea change in how businesses buy.  Amazon has AmazonSupply and eBay has the B+I category – businesses like the consumer experience vs. the heavy b2b type experience and a sleeper category for eBay (meaning you don’t hear any buzz about it, but it continues to outperform) is B+I.  B+I is doing great with a 17% y/y growth rate and not much concentrated focus.

In-line categories

  • Tickets has been in our top category for a long time, and slowed down somewhat surprisingly in Q2 at only 11% y/y growth (it was 25% in Q1).

Underperfoming categories

  • Musical instruments – Not sure what’s going on with this category, it should be a sweet spot for eBay given the focus on price and substitutions for refurbs.
  • BMV, video games, coins and stamps, vehicles are all categories that have historically be structurally challenged, so no surprises there.

Conclusions

Q2 was mixed for eBay. Long-term, I think sellers should look at it as mostly positive with the acceleration of active users – that’s the best metric to look at for the long-term health of the marketplace and it was great to see this continue to accelerate.  We’ll be looking for any other information on the EU softness and perhaps Amazon may have a similar or different story to help decode what is going on.

Up next, we’ll be reporting on Amazon’s Q2 which they release on July 25th. Stay tuned to sister site AmazonStrategies for a preview and similar analysis of how they performed.

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