Preview of eBay’s Q3 Results Seller-Oriented

October 20, 2015

ChannelAdvisor Scot Wingo By Scot Wingo

eBay is set to release Q3 2015 results after the market closes on 10/21 (Wednesday).   This will be eBay’s first report as an independent company, so it will be interesting to see how they approach the tone of the call and if they introduce any new metrics now that eBay has separated from PayPal and eBay Enterprise.

eBay’s Q2 results were not great as the eBay marketplace continued to show slowing in most metrics.

Below the dashboard is a list of what we’ll be looking for from the Q3 results along with the Q2 results for comparison and where Wall St. expectations are:

ebay_q3_15dashboard

 

What we’ll be watching for in the release and call:

  • Growth – ComScore reports that e-commerce is growing at 15% and Amazon has been growing at > 25%.  eBay has been steadily losing the battle over the last year to keep up with the growth of e-commerce and is losing substantial share to Amazon.  Our SSS data for eBay in Q3 came in at 3.4% which showed further deceleration.  We will be watching for any signs of a turnaround in growth, which has historically shown up first in the active user metrics.
  • Color commentary on the macro environment – Wal-mart, Macys and other retailers have lowered their expectations for Q4 and 2016 because of consumer spending pressure.  It’s not clear if those are centered on brick-and-mortar retailers or if eBay will also experience some slowdowns.
  • Mobile – As a combined company, it was hard to get a real feel for how much of eBay’s GMV is directly from mobile or influenced by mobile.  It will be interesting to see if standalone eBay sheds any light on this.  Google recently reported that more than 50% of their global traffic is now mobile (note that Google does not include tablet in their definition of mobile).
  • Hack and SEO remediation – For over a year now, eBay has been fighting the headwind of a Google SEO action as well as a forced password-reset due to a security breach.  Since then, eBay has struggled to recover to in-line e-commerce growth rates.
  • Active users – As mentioned in the Growth bullet, we believe that active users is the most forward looking metric that eBay has and that’s where we have historically seen signs that a recovery is taking hold in this metric.
  • Sellers – As we have mentioned, sellers are very confused about who eBay is and is not targeting.  EBay has met with top sellers to say they are a target and then met with small sellers to say the same thing, while saying large sellers are not the target.  We’ll be listening for clarification on who eBay sees as a good target for the platform and, perhaps more importantly, who is not.
  • Consumer Experience (CX) / User Experience (UX) improvements – As discussed in our coverage of the eBay seller release, we believe that the Fall release doesn’t go far enough to address the two areas of eBay that are most in need of repair: the fee structure and search engine/finding experience.
  • Team – In the US, the new leader, Hal Lawton, is building out an impressive real-savvy team.   EBay recently announced:

Conclusion

In the world of e-commerce, Q3 sets you up for a good or bad Q4 holiday selling season, so we’ll be listening for any signals and signs of recovery or continued slow-down from eBay – stay tuned!

This blog was written by Scot Wingo, Executive Chairman, ChannelAdvisor