Can eBay Regain Its Mojo?

by Trefis Team
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eBay (NASDAQ:EBAY) reported mixed Q3 results last week. On the positive side the company’s payment seller volumes grew to over 20,000 in Q3 2019 (compared to a little over 6,000 in Q2 2019) and total payment GMV crossed a billion. However, its core business reported a weak GMV figure due to shrinking marketing spend. Despite near-term headwinds, we think eBay is on the right track. Shepherded by Elliott Management, eBay seen several changes over recent months – starting with its erstwhile CEO Devin Wenig stepping down in September. While the erstwhile CFO Scott Schenkel has been serving as the interim CFO, we expect him to also take a less prominent role once the board is able to find a suitable CEO.

Trefis captures trends in eBay’s Revenues over the years along with our forecast for the next two years in an interactive dashboard. Additionally, you will see more Trefis Technology company data here.

A Quick Look at eBay’s Business Model

What Need Does It Serve?

eBay is an online commerce platform and makes money through online advertising and commission income on product sales.

What Are The Alternatives?

eBay competes with the likes of Amazon, Groupon and other e-commerce sites.

Has 2 Operating Segments

  • eBay Marketplaces: Segment revenues are derived from commission on product sales.
  • Marketing & Advertising: Segment revenues are derived from listing fees and advertising income.


Understanding Trends in eBay’s Revenues

eBay’s revenue grew 19.7% over 2016 to 2018 to $11 bn and is expected to increase 15% to over $12 bn by 2020.

(1) eBay Marketplaces Division revenue growth of $1 bn over the next two years is likely to be driven by better holiday season performance and ability to partner with payment vendors other than PayPal.

(2) Marketing & Advertising Division revenue growth of $0.4 bn over the next two years is likely to be driven by a more focused approach towards advertising business by potentially hiving off its StubHub and Classified businesses.


Expected Trends Over Coming Months


  • Internet sales tax: eBay expects this U.S.-related development to impact its top line until next year Q3, by which time most states should have adopted it. Q4 saw California and 10 other states adopt the tax, which is likely to keep the GMV weak (3% weakness in Q3 GMV was attributable to the roll out of the roll-out of internet tax).
  • StubHub disposal: eBay is likely to announce some measures around the ticketing platform by end of next quarter.
  • Core-business GMV: The management believes that marketing spend will continue to contract and GMV growth going forward will be dictated by eBay’s success with social selling and its own payment system.
  • PayPal agreement: The agreement with PayPal ends in July 2020, after which eBay should see faster growth in number of sellers on its payment platform.

Our interactive dashboard highlights how these trends can impact eBay’s Revenues.


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