eBay Annual Active Buyers Decline by 9%

EBay’s earnings results, announced after the market close on Wednesday, showed declines in low-value active buyers but gross merchandise value (GMV) was up compared to pre-pandemic levels.

To that end, annual active buyers declined during the quarter, as measured year over year, to 147 million.

In terms of the headline numbers, the company’s revenues — up 4% on an FX-neutral basis — met expectations at $2.6 billion. Earnings, at $1.05, topped the Street at 99 cents a share.

Supplemental materials released by the company in tandem with earnings showed that total GMV was $20.7billion, down nearly 11% on an FX-neutral basis.

Annual active buyers declined 9% during the quarter to 147 million. Annual active sellers also were down in the high single digit percentage points, to 17 million.

In its materials, eBay said that managed payments delivered $2 billion in revenue in 2021. Promoted Listings delivered approximately $227 million of revenue in Q4, up 4% on an FX neutral basis.

The company said that it saw “faster GMV growth in focused categories that now represent approximately 20% of global volume,” per the earnings release. Categories of note included the sneaker business, which continued to grow at double digits globally; the firm’s luxury watches and handbags categories also saw double-digit growth in the U.S.

CEO Jamie Iannone said on the conference call with analysts that sneakers over $100 continued to grow at double-digit percentage points, as well.

Another new growth capability where scaling for sellers has been the coded coupon tool. The CEO said that since launch sellers have realized over $350 million in gross value, “and over 60,000 sellers have driven repeat purchases from almost 6 million buyers.”

EBay said that its advertising revenue in the quarter stood at $285 million, up slightly from $284 million in the year ago quarter. Iannone said that adoption grew at double-digit rates in both the number of sellers and the number of listings promoted.

“Looking at the full year, our advertising business, including both first-party and third-party ad products, surpassed $1 billion, up 9%,” he told analysts. “To drive the next growth cycle in advertising, we expanded the rollout of new products to more sellers and markets during the quarter.”

Chief Financial Officer Stephen Priest said that the expected decrease in active buyers was primarily driven by low value buyers, which fell 9% versus Q4 of 2019.

“Growth in high-value buyers over the same period was 3%. Although fewer buyers sold on eBay as compared to pre-pandemic levels, total high-value buyers were up due up … and importantly, even as mobility restrictions have been lifted, spend for high-value buyer continues to expand at healthy rates,” Priest said.

Iannone said that high-value buyers are really made up of 2 groups, buyers who sell and then high-value buyers, buyers who buy over $800 and shop 6 times a year.

Additionally, on a geographic basis, U.S. GMV grew 22% versus Q4 of 2019, while international GMV declined 1% on an FX-neutral basis.

“Our U.S. and international markets were impacted by softness in overall online shopping activity during the Cyber Five holiday period, but both geographies improved during the remainder of December,” Priest said.

Core macroeconomic factors like gross domestic product (GDP), retail growth and inflation have been notably stronger in the U.S. than international markets.

For the full year, the company is forecasting GMV to decline by 5% to 8% on an FX-neutral — lapping a period of significant global mobility restrictions and the U.S. stimulus effect, according to management.