Is eBay Losing Its U.S. E-Commerce Footing To Walmart?

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eBay (NASDAQ:EBAY) has had some trouble competing with Amazon (NASDAQ:AMZN) in the U.S. e-commerce market in the last couple of years, both in terms of web traffic and sales. This was reflected in the company’s first quarter results, with its global net marketplaces revenue falling 2.3% year-over-year (y-o-y) to $1.5 billion compared to Amazon’s 25% y-o-y growth to $26.6 billion in the same period. eBay has especially been struggling in the domestic market which contributes about 39% of its net marketplaces revenue. ebay-44
Web traffic data from comScore suggests that Amazon may not be the only stumbling block in eBay’s path to growth in the near term. Walmart (NYSE:WMT) has aggressively expanded and promoted its e-commerce business in the last year to improve its top line growth and online footprint. ((comScore Ranks the Top 50 U.S. Digital Media Properties for February 2016, comscore.com, March 21 2016)) ebay-42

Per comScore’s web traffic data for the U.S., there were 98.7 million unique visitors on eBay’s websites in January 2016, which was about 38% of the total Internet audience that month. This declined drastically from January 2015, when 48% of the total U.S. Internet audience visited eBay’s websites at least once in the month. eBay’s loss (of 23 million visitors) has partially been Walmart’s gain, with the retailer attracting 91.6 million (35%) unique online users in the U.S. in January 2016 compared to 83.2 million (33%) in January 2015. Amazon also marginally improved its unique visitor count in the same period, from 180 million to 183 million.

It is interesting to note that the difference between eBay and Walmart’s online unique visitor count was over 39 million (122 million minus 83.2 million) in January 2015 which declined to about 7 million (98.7 million minus 91.6 million) in January 2016. The total Internet audience figure reflects the total number of unique online visitors in the U.S. Since every online user generally visits more than one site in the month, the unique visitor count is not a zero-sum-game.

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We have seen how this web traffic decline impacted eBay’s sales in the first quarter this year, and it will be interesting to see if the trend continues in the second quarter as well. eBay expects its overall sales in the second quarter to grow 1-4% y-o-y to $2.14-$2.19 billion, against analyst consensus estimates of $2.05-$2.17 billion.

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