Marketing expenses rose over 15%
eBay’s (EBAY) marketing expenses have been rising. The company is investing in brand campaigning to bring more shoppers to its platform. In fact, eBay’s sales and marketing expenses rose more than its revenue growth in the second quarter.
The company’s marketing expenses rose 15.3% YoY to $838 million in the second quarter, while its revenues grew 9.0% YoY to $2.64 billion in the quarter. eBay’s marketing expenses have been rising at an increasing rate in the past year, as you can see in the following chart.
Brand campaign drove the marketing budget
eBay, Amazon (AMZN), Alibaba (BABA), and JD.com (JD) have been battling to lure online shoppers and generate revenues in the e-commerce space. eBay increased its brand investments, which raised its marketing expenses.
eBay is also focusing on making its platform user-friendly to compete with Amazon, which dominates the industry. During the quarter, the company rolled out a new feature called “Interests” that will help make consumers’ shopping experience better. The company also introduced “Best Price Guarantee,” which will give consumers access to the best deals for their required items.
A continuous rise in eBay’s sales and marketing, product development, and general and administrative expenses compared to its revenue growth weighed on the company’s operating margin. eBay delivered operating margin growth of 25.2% in the quarter—down from 26.4% in the same quarter in 2017.