Here’s How eBay Can Benefit From Its “Quick Sale” Platform For Smartphones

September 21st, 2016 by Trefis Team
-4.11%
Downside
50.94
Market
48.85
Trefis
EBAY: eBay logo
EBAY
eBay

As consumers lined up to upgrade their phones to iPhone 7 (launched on September 16th), they were looking to sell their older generation phones as fast as possible to generate cash for the new purchase. eBay  (NASDAQ:EBAY) seized this opportunity and a few days before the iPhone 7 launch the company announced a new program called “Quick Sale” to make it easier for consumers to sell their older smartphones. According to eBay, an iPhone 6 or 6s model has been sold on its platform every minute since August 1, 2016 after rumours around the launch of iPhone 7 began. eBay is looking to make its platform easier for buyers and sellers as part of its turnaround program. We believe that,  as the trend of upgrading smartphones continues and value buyers to purchase pre-owned smartphones, eBay’s quick sale platform can allow the company to capture a significant share in this market, driving revenues in the long term.

Used Smartphones A Huge Opportunity

Relevant Articles
  1. Up 19% YTD, Where Is eBay Stock Headed?
  2. Trailing The S&P By 20% This Year, Can eBay Stock Rebound?
  3. Down 4% YTD, What Should You Expect From eBay Stock?
  4. eBay Stock Is Down 7% YTD, What’s Next?
  5. What To Expect From eBay Stock?
  6. eBay Stock To Post Mixed Results In Q1

According to Deloitte, used smartphones will be a $ 17 billion market in 2016 and at least 10% of premium smartphones purchased in 2016 will have two or three owners before being retired. Consumers who cannot afford high end smartphones increasingly prefer pre-owned models—a trend that is more visible in emerging economies. Given the imminent timing of this transition, eBay could very well increase the transactions on its platform by using program to draw sellers of smartphones before an impending launch. eBay’s new “Quick Sale” platform allows sellers to determine the current offer amount on their phone, to print out a free shipping label and to send the product to eBay Valet. The seller is paid immediately after the phone is received and verified. eBay is looking to provide convenience and speed to sellers looking to sell their older generation phones and get paid in time to purchase the new model once it is launched.

According to our estimates “Transaction Revenues” is the most valuable segment for eBay accounting for more than 70% of its valuation.  One of the key value drivers of this segment is the number of active users on eBay and we expect this figure to increase from 165 million in 2016 to around 210 million users by the end of our forecast period.

The “Quick Sale” platform can attract more users to eBay as sellers look for a quick and easy sale of their smartphones. While this platform is currently aimed at iPhone users, we believe this can become a key attraction for other smartphone users who are looking to upgrade their phones. We believe this is a significant opportunity for eBay to capture and attract users to its new Quick Sale platform. An increase in the number of active users on its platform will lead to an upside in eBay’s valuation.

We care deeply about your inputs, and want to ensure our content is increasingly more useful to you. Please let us know what/why you liked or disliked in this article, and importantly alternative analyses you want to see. Drop us a line at content@trefis.com

Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap