eBay Experiences Boom from India’s Small Exporters
eBay’s (NASDAQ:EBAY) India business is reporting impressive top-line growth in exports. Based on information from the Asian Exporters’ Index, India was the second-fastest growing country for eBay’s exports after South Korea with Indian exports growing by 85% year-on-year (YoY) on the website. [1] This trend also reflects the popular demand of exotic, country-specific items, especially in developed nations. eBay competes with other e-commerce sites like Amazon (NASDAQ:AMZN), Wal-Mart (NYSE:WMT) and Overstock (NASDAQ:OSTK).
We currently have a price estimate of $39 for eBay’s stock, which is about 30% above the current market price.
Strong Asian Exports Should Shift eBay’s Marketplace Revenues
While developing countries are seeing a large spike in exports, what is more encouraging for sellers is that this growth is mainly coming from small-scale manufacturers producing country-specific items such as diamonds from India and electronics from China.
This is a win-win situation for e-commerce sites such as eBay as governments continue to support handicraft and local manufacturers who in turn enjoy healthy demand in developed countries such as the U.S., U.K. and Australia. With concerns over U.S. and European economies still looming large, eBay’s marketplaces’ revenues should see an increasing proportion of revenues coming from the Asia-Pacific. Currently, the U.S. contributes about 45% of eBay’s net revenues. [2]
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