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October 18, 2012

Details of eBay's Q3 2012 Results with key metrics for sellers

Yesterday, October 17, 2012, eBay announced Q3 2012 results that either met or beat Wall St. expectations. In this post we dive into the results and highlight those items that have the most impact for sellers.

Third quarter results tracker and highlights

Ebay_q3_results_tracker

Revenue came in right at expectations.  The key marketplace metrics were very strong:

  • Overall GMV grew 15% y/y to $16.28b - tracking in-line with e-commerce
  • US GMV accelerated to 16%
  • Intl GMV grew 15%
  • Sold items grew 19% y/y which was robust (but since it's higher than GMV, indicates ASPs trending down - probably mix-driven)
  • The biggest highlight metric of the Q was active users which grew 10% to 108.3m   This is the highest growth rate in this metric since 2007 and bodes well for the future if eBay cna retail these new users and keep them active.

A couple of other highlights:

  • FP grew 20%, auctions grew 4%
  • FP is now 66% of sales
  • Auctions are now 25% (a new low point)
  • US represented 40% of GMV and intl 60%
  • Strong performance in Clothing, Shoes and Accessories and tickets (see 'category details')
  • 36% of sales were from Top Rated Sellers (eTRS), those users grew at 24% y/y
  • Mobile mobile mobile!
  • 800k of the new users were from mobile
  • mobile users trend younger and more female 
  • 100m items have been listed with eBay's mobile selling tool

One final interesting tidbit from the call, they did mention Cassini (eBay's new search technology) is handling a set of queries of a 'real audience' and the results are strong.  They also mentioned that they will be ramping that up over the next 12-15 months.  We'll keep you posted on what that means because we all know search changes have the highest impact possible on sellers.

eBay's growth vs. e-commerce

On the conference call, Donahoe talked about three areas they believe are going to help them grow faster than e-commerce:

  1. Leverage data where possible for personalization and merchandising (for example eBay Flow)
  2. BRIC (Brazil, Russia, India, China) expansion and other emerging markets.  They spent a lot of time talking about Brazil which is interesting as their partner Mercado Libre is there and I think most folks thought they would acquire that business vs. compete, but it sounds like they are going to compete.
  3. Local

While eBay focuses on those three areas, here's a chart that shows the different components of eBay that they report and how they are tracking against e-commerce growth as reported by ComScore:

Ebay_q3_ecomm_growth_rates

You can see the fastest growing component is the eTRS growth rate of 24%.  As more and more of the GMV comes from eTRS, then that should create a tailwind on the overall GMV growth-rate.

Category details

eBay had some interesting results inside the categories.  Here is the Q3 category-level results sorted by size.  Home and Garden continued to lead the pack from a size-perspective.  New this quarter, we include the % of the total of all GMV ex-autos for each category.  There's also a pie chart later that shows this graphically.

Ebay_q3_categories_size

This next table sorts the Q3 category results by y/y growth rate:

Ebay_q3_category_growth

The leading categories were 

  • CSA - Clothing Shoes and Accessories - The fastest growing category clocking in at a 19% y/y growth rate.
  • Tickets - as Swan mentioned had a nice acceleration to 18%
  • P+A - 17% growth rate, continues their strength
  • Cell phones - I'm going to guess iPhone5 drove this

In the yellow zone (growing, but not as fast as e-commerce)

  • photo+CE+Computers - sluggish, Amazon is killing it here and eBay needs to double down.
  • Sports - decent showing
  • Toys, jewelry and musical instruments - hanging in there, hopefully will get a Q4 pop.

In the red zone (not growing) we have:

  • Video games - continue to stumble waiting for a new console upgrade cycle or a killer new game (Halo4 anyone?!)
  • BMV - secular shift to digital where eBay doesn't have a pay.
  • Coins and stamps - phew down 22%, that must be tied to the gold price cycle.

Finally, we get a lot of questions about category mix on eBay and this pie chart shows just how diverse the set of categories eBay manages are.

Ebay_q3_category_pie

Q4 here we come!

eBay's Q3 results bode well for a great Q4.  On the call, eBay committed to running a Q4 promo 'the same scale' of last year on a % basis and with revenue up 13%, I'm thinking that means they'll spend 13% more than last year which will be much appreciated by the seller-base.

This post was written by Scot Wingo, CEO, ChannelAdvisor. I am long Amazon and Google. eBay is an investor in ChannelAdvisor.

 

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