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April 18, 2013

eBay's Q1 2013 Results (from a seller's perspective)

Yesterday, April 17, 2013, eBay announced their 2013 Q1 results.  Long-time readers know the drill, but if you are new, we always take the results and parse through them focusing on a) the marketplace part of the business and b) those metrics that we feel are meaningful and actionable for sellers and retailers.

Don't forget Catalyst

Before we dig in, I wanted to remind everyone that our annual conference, Catalyst, Is coming up April 29-May 1 in Vegas at the M.  We are nearing capacity, so I recommend if you want to come, sign up ASAP.

We have executives from eBay (Devin Wenig), Amazon (Sebastian Gunningham) and a host of other e-commerce channels coming as well as lots of retailers sharing their success stories.  We're really looking forward to seeing everyone soon!

Overview of eBay's Q1 results

While ComScore hasn't come out with their Q1 report for e-commerce growth yet, forecasts  believe that we will see US e-commerce growth in the 13-15% range.

Earlier in the Q, eBay hosted a comprehensive analyst day.  It's extremely detailed, but I recommend all sellers watch (Recording is here) at least the Donahoe, Devin Wesnig and Christopher Payne segments (you can jump to them using the very handy speaker navigation at the bottom of this viewer.  If you are interested in CBT, the Wendy section is very good as well.

During analyst day, eBay outlined a three year journey highlighting their plans for eBay, Paypal, etc.  If you listen to the Q1 analyst call they outline how Q1 fit into that 3yr plan.  Here's a highlight from Donahoe's segment from the transcript.

Let me briefly recap three areas that capture the strength and opportunities for our company. First, the $10 trillion commerce market represents a bigger addressable market for our company. In fact, as we shared at analyst day, by 2015 we expect eBay Inc. to enable $300 billion in commerce volume. That’s up from $175 billion in 2012. This is one of the ways we will measure our success. And as a first step on our journey toward $300 billion, we enabled $49 billion of commerce volume in Q1.

In this post we'll go over the seller-oriented highlights from the Quarter with information drawn from the press release, the analyst presentation and conference call.

Updated Q1 dashboard:

Here are the key metrics from the quarter: (click to enlarge)

Ebay_q1_dashboard

As you can see from the table, eBay's US GMV grew at 16%, ahead of the likely e-commerce growth rate of 13-15%.   International growth slowed a bit to 11%. eBay cited headwinds with Europe, China and Korea on the call. 

Some other metrics of note from the conference call:

  • The CSA category and Home and Garden were material growth drivers.
  • Fixed price is now 68% of GMV and grew 17%
  • Auctions grew 2% y/y
  • Top Rated Sellers (TRS or eTRS) were 42% of eBay's US GMV and their SSS was up 17%.  

The most exciting metric from Q1 was active user growth.  Users grew 13% y/y to 116.2m in the Q which is the fastest we've seen since we've been closely monitoring it (circa '08).  Why did active users accelerate......?

Mobile mobile mobile mobile

 eBay attributed the bulk of the new adds (3.9m added sequentially) were driven by mobile: 2.8m.  In other words 1.1m new users were from desktop-systems (28%) and 72% (2.8m) were driven by mobile platforms.

That's quite impressive and hopefully if eBay can keep these new buyers engaged, they will increase their buying over the next year.

 

eBay Category Details

Unlike Amazon who is very closed with their category data, eBay releases detailed category metrics every quarter that we analyze for you.  Here is a chart that lists each category from largest to smallest indexed by their Q1 2013 GMV.

Ebay_q1_13_category_by_size

A couple of things to note in the above:

  • There are 7 categories (in yellow) with quarterly GMV over $1B.  
  • H+G continued its reign as the king of eBay categories, coming in at $2.7b for the Q - a solid 35% ahead of the next largest category, CSA.  One yellow flag, H+G slowed to 10% growth (it grew 16% y/y in Q4, so this is a bit of a deceleration.
  • CSA grew very nicely at 18% y/y, making it not only a top tier scale category, but a top grower as well - kind of the 'magic quadrant' for an eBay category.
  • CE was strong for eBay as well.  That's good news as the category appeared under pressure the last couple of Q's.

The next chart looks at each category by their y/y growth rate (more relevant in our world than sequential Q->Q growth).  The green indicates the category grew faster than e-commerce (ComScore  reported Q4 at 14%), the yellow is in-line and the red is substantially lower than e-commerce.

Ebay_q1_13_category_by_growth

Outperforming categories

  • Cell phones - eBay is doing quite well in this category.  eBay offers a plethora of inexpensive accessories, refurbed phones and new phones that are hard to find.
  • Tickets - still on fire.
  • B+I - we are seeing a huge sea change in how businesses buy.  Amazon has AmazonSupply and eBay has the B+I category - businesses like the consumer experience vs. the heavy b2b type experience and a sleeper category for eBay (meaning you don't hear any buzz about it, but it continues to outperform) is B+I.  B+I is plugging right along at 14% without much concentrated focus.

In-line categories

  • P+A - I was surprised to see P+A here as it usually is the fastest growing category.  Unfortunately we experienced a very harsh February from a weather perspective and that appeared to really slow P+A.
Underperfoming categories
  • Musical instruments - Not sure what's going on with this category, it should be a sweet spot for eBay given the focus on price and substitutions for refurbs.
  • BMV, video games, coins and stamps, vehicles are all categories that have historically be structurally challenged, so no surprises there. 

Conclusions

For Q1 2013, eBay started the year with 16% GMV growth in the US  in a 14% e-commerce growth environment.  Active user acceleration was the highlight of the Q, driven by new users flowing into the marketplace platform from mobile.

Up next, we'll be reporting on Amazon's Q1 which they release on April 25th. Stay tuned to sister site AmazonStrategies for a preview and similar analysis of how they performed.

Scot Wingo wrote this blog post. I am CEO of ChannelAdvisor where eBay is an investor.

 

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