Marketplaces Unit: eBay’s Core Business



eBay’s Marketplaces unit

eBay (EBAY) Marketplaces’ GMV (gross merchandise volume) fell 2% on a YoY (year-over-year) basis in 2Q15. The continued strength of the dollar significantly influenced the results. However, eBay’s total GMV rose 6% on an FX-neutral basis—a point higher from the prior quarter. The company’s GMV for its Marketplaces business grew 2% in the US, while the international GMV fell 5%. Active buyers in the eBay Marketplaces business unit rose by 6%.

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eBay intends to focus on its core business—the Marketplaces business. The company’s President Devin Wenig mentioned his strategy to focus on core buyers and sellers during the earnings conference call. He commented that “We intend to focus on our target customer base and on a market segment where we believe we can win.”

Although eBay’s overall revenue growth of 7% is far less than Amazon’s (AMZN) growth of 20%, it’s still positioned better than brick-and-mortar players like Walmart (WMT) and Best Buy (BBY). This is because the e-commerce and m-commerce market is expected to eat away the share from traditional retailers.

According to a report from eMarketer, US e-commerce sales as a percentage of total retail sales will continue to rise from 6.40% in 2014 to 8.90% in 2018. In contrast, m-commerce sales as a percentage of total retail sales will rise from 1.20% in 2014 to 2.40% by 2018.

For diversified exposure to eBay, investors can consider ETFs like the SPDR S&P 500 (SPY). This ETF invests in the 500 largest US companies. The technology sector accounts for 18% of SPY’s portfolio.


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