Has eBay turned the growth corner?

September 9, 2009

ChannelAdvisor ChannelAdvisor By ChannelAdvisor

We were recently evaluating our August results and saw an interesting data point that I wanted to share with readers.  One of the measurements we follow closely is Same Store Sales – this basically compares the current year period (August 09 in this example) to the prior year (August 08) and strips out any customer adds/attritions so we get a clean apples to apples picture of what’s going on.

For the first time (in a loooong time), eBay showed positive SSS GMV growth, coming in at 4.6%.  In the first Q, eBay was in the negative 10% range, and then in Q2 came in around -5%, so it’s interesting to see a pretty material swing here.  Of course this begs the question – why? which we’ll cover later.  First I wanted to share our SSS data in graphical form through August 09:
This chart has the following elements:
  • ChannelAdvisor SSS – CA’s all in SSS trends – this counts ALL channels.
  • eBay SSS – we’ve covered this
  • Amazon SSS – Amazon SSS – this is primarily in the EGM (Electronics and General Merchandise) as we don’t have a lot of exposure to the media/video games categories.
  • Comscore – Comscore regularly reports ecommerce trends and recently came out with a bearish dip for the August Back to School season showing – 3% y/y.
As you can tell from the chart, Amazon is on a pretty strong growth trend and shows no signs of letting up.  Overall CA e-commerce is growing right around 10% y/y which is a slight improvement from the first part of the year and a material improvement from Q408.
Now let’s dig into the eBay blip that you can clearly see from the chart.
Why are eBay SSS up?
Peeling the onion on the data, we noticed a couple of things contributing to the increase in eBay SSS:
  • eBaySSS fixed-price is growing at a really strong clip (40%+) vs. eBay auctions which are declining at 20%.  Sellers have finally gotten the message and moving their business models to the FP30 format and abandoning the auction format in wholesale.  The scale of the FP business is now large enough to start to move the needle on SSS – earlier in the year the FP growth was masked by the scale and decline of the auction business.
  • Bing – Bing was running some nice promos in August and had the eBay cashback at 10%+ for most of august
  • We’re annualizing the recession –  Economics peg the start of the recession at March of 08, but it hit consumers (and consequently ecommerc spending) in the Aug/Sept timeframe.
  • Anecdotely eBay seems to be doing more marketing – we noticed this first in the EU in Q2 and now it is trending up in the US.
Is this a blip or a sign of a turn-around?
It’s too early to call if this is a one-time blip or if we’re seeing a trend  that indicates eBay has turned the corner, so we’ll be keeping an eye on September and how things play out.  I do think the late-Sept changes will be largely positive for transactions (especially search changes) so they should be helpful.
Sellers – let us know if you are seeing improvements, or not, and your thoughts on if we’re seeing a turn-around with eBay or not.
SeekingAlpha Disclosure – I am long Google and Amazon.  eBay is an investor in ChannelAdvisor.