eBay ended 2020 with a flourish, with Q4 and full-year results that came in ahead of expectations. The eCommerce stalwart saw its annual active buyers count up 7 percent to 185 million globally, and added two million buyers in the fourth quarter over Q3. That increase, CEO Jamie Iannone said in his call with investors, is partially attributable to the COVID-19 pandemic, but is also due to eBay’s expanding efforts to grow its customer base, particularly among Gen Z and millennial consumers.
Over the course of the last year, eBay has picked up 11 million new buyers, Iannone said in response to an analyst’s question about how likely eBay is to keep its massively expanded audience from 2020 into the year 2021.
“What we’re seeing is that the behavior when we look at things like frequency and retention is not different, and is as strong as we’ve seen in past cohorts,” Iannone said. “That means they didn’t just come to eBay to buy a specific deal, and then we won’t see them again. We’re doing a good job of turning a percentage of them into enthusiasts. And what we’re really focused on is how we turn them into product category shoppers.”
To that end, Iannone called out eBay’s 2020 rollout of an authenticity guarantee for watches and sneakers. Luxury watches saw a double-digit gross-merchandise volume increase from the third to the fourth quarter, while sneakers saw triple-digit growth year over year. And though those categories represent just a single digital share of eBay’s total gross merchandise volume, he said, they are simply a starting point. According to Iannone, the plan is to continue rolling out new category experiences from an end-to-end perspective over the course of the coming years.
He also said that eBay’s ongoing dedication to enhancing its cross-category selling efforts — and expanding their users’ interactions with the platform — include converting more of the site’s shoppers into sellers.
“A big reason we also focused on C2C selling is that when we acquire that customer to come in as a buyer and then we get them to do any kind of casual selling, they become two to two-and-a-half times more valuable to us as a buyer,” Iannone explained, in response to an investor’s question on eBay’s strategy to pursue a cross-category selling model in an increasingly crowded eCommerce marketplace. It’s a marketplace that eBay navigated quite successfully in Q4 when it reported earnings of $781 million, or $1.12 a share, compared with $535 million, or 66 cents a share, at the same time in 2020. Revenue rose to $2.9 billion from $2.3 billion in the year-ago quarter, meaning eBay came out ahead of both analyst estimates for earnings and revenue, which were 83 cents a share on $2.7 billion.
Q4 also saw eBay log a GMV increase of 21 percent to $26.6 billion, carried by holiday sales, which grew 32 percent year on year.
For the full year, eBay’s GMV volume increased by 17 percent to $100 billion, and revenue was up 19 percent to $10.3 billion.
eBay also said that its total ad revenue passed $1 billion for the year — a new record.
“I am proud eBay was able to be there for our buyers, sellers and community, especially in the face of a global pandemic,” said Iannone. “We finished the year with strong financial results, but what inspires me most is the support we’ve been able to extend to small businesses — providing them with tools, resources and access to millions of buyers globally. We will continue to invest in product and technology in order to deliver the best marketplace in the world for our customers.”
The firm went on to forecast continued strength in early 2021 — with Q1 earnings estimated to come in at 81 cents to 86 cents on revenue of $2.94 billion to $2.99 billion, slightly ahead of the 85 cents a share on revenue of $2.5 billion forecast by analysts.
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