PayPal could surpass eBay Marketplaces’ revenues by the end of this year
PayPal has started to become the most valuable business for eBay (EBAY). Although eBay’s Marketplaces business still contributes about 10% more revenues than PayPal, Paypal could start contributing more revenues than eBay Marketplaces by the end of this year. This is because PayPal’s revenues grew by 20% in the last quarter compared to the corresponding quarter a year ago, while eBay Marketplaces’ revenues grew by just 8%.
PayPal ahead of eBay Marketplaces on mobile
PayPal has already surpassed eBay in terms of gross merchandise volume (or GMV) on mobile. Overall, the mobile GMV grew by 68% to $12.3 billion in the last quarter and now represents 20% of total GMV on eBay. Although eBay’s overall revenue growth is far less than Amazon’s (AMZN), it’s still positioned better than brick-and-mortar players like Wal-Mart Stores (WMT) and Best Buy. This is because the e-commerce and m-commerce market is expected to eat away share from traditional retailers.
According to a report from eMarketer and as the chart above shows, U.S. e-commerce sales as a percentage of total retail sales will continue to rise from 5.8% in 2013 to 8.9% in 2018. On the other hand, m-commerce sales’ percentage of total retail sales will rise from 0.9% in 2013 to 2.4% by 2018.
eBay is looking to leverage fast growth potential of mobile advertising market
According to another report from eMarketer, the global mobile ad spending increased from $8.76 billion in 2012 to $17.96 billion by 2013—an increase of 105%. eBay is looking to leverage this growth as it plans to show more ads to users on mobile in the coming quarters. Although this market is currently dominated by Google (GOOGL) and Facebook (FB), eBay will do well even if it can acquire a small share in this market.