Is eBay back in the growth game?
eBay revises its Q2 guidance upwards, now expecting two-digit growth for the first time in years
eBay has made its mark in the world of online retail as one of the first and biggest online marketplaces. Lately, the marketplace pioneer has rather made headlines for its poor performance, though. eBay’s GMV has been stagnating for a long time and while Amazon’s marketplace and other competitors surged, eBay at best reported growth in the low single digits. It is thus all the more surprising that the company has raised their Q2 2020 expectations twice in a row.
While eBay reported rather weak results for Q1 2020 – revenues amounted to US$2.4 billion, which corresponds to a loss of 2% compared to the previous-year period – the company already announced at the end of April that they were noticing a rise in platform traffic, conversions and other key metrics as a result of the COVID-19 lockdown measures. Thus, the Q1 earnings report already included revenue expectations for Q2 between US$2.38 billion and US$2.48 billion, which corresponds to a year-on-year growth of 2% to 6%. Last week, eBay released an update in which they even revised this guidance upwards, now expecting Q2 revenue to amount to as much as US$2.8 billion. This would mean a growth of 16% compared to Q2 2019. Gross merchandise volume is even expected to grow by 23% to 26% compared to the previous-year second quarter according to the latest update, following continuing strong performance in April and May.
The reason for these stunning news is without doubt a massive corona effect. eBay has attracted about 6 million new and reactivated buyers in April and May only, as brick-and-mortar retail was still highly restricted and many people were reluctant to leave the house for anything but the most essential. This apparently raised demand on eBay across all categories and also attracted new sellers, who were trying to find new ways of reaching out to customers amid the lockdown. eBay said in its latest update that “tens of thousands of small businesses” have joined the platform since March 2020.
Whether eBay can keep up with this performance in the longer term remains to be seen. The company didn’t adjust its full-year 2020 guidance, but reported that it will probably also be above the previously reported expectations. For now, the eCommerce world is eagerly awaiting eBay’s actual Q2 results.
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