eBay Makes a Run at StockX With New Emphasis on Sneakers

For years, eBay was among the best places online to find collectibles, but as the eCommerce market has grown and other platforms have emerged, its dominance has subsided — though the company is determined to change that by focusing on specialized categories and developing capabilities to cater to enthusiasts.

For example, eBay recently launched a new tool that allows sellers to add interactive, 360-degree images of their sneakers to listings through a partnership with Unity, a platform that can be used for real-time 3D modeling. Starting this month, select sneaker sellers will have access to the tool, with plans to expand access in 2022.

In October, the eCommerce platform also rolled out a sneaker authentication service to help combat counterfeiters and later acquired Sneaker Con, the third-party company it was using for the service.

Of course, eBay is far from the only company trying to seize on opportunity among sneakerheads, with StockX offering 360-images and authentication services for several years and Nike also catering to enthusiasts through several direct-to-consumer (D2C) initiatives.

And it remains to be seen whether eBay can offer customers something that these other platforms cannot. Brand loyalty is deflated, with consumers more open to trying new products and platforms, but buying secondhand or collectible items, especially online, requires a certain amount of trust, which eBay is trying to build — but perhaps not quickly enough.

A Shrinking Base

The addition of these new tools comes as eBay tries to cater to “high-value” buyers, or those making at least six purchases per year at over $800; these shoppers represent 20% of eBay’s customer base but deliver 75% of the company’s gross merchandise value (GMV). In addition to sneakers, eBay is also prioritizing luxury watches, handbags and trading cards.

As of Sept. 30, eBay had 154 million active buyers, down 5% year over year. The decline was attributed by Chief Financial Officer Steve Priest to the natural shedding of “low-value buyers,” an approach the executive said eBay is “confident in.”

“But we recognize that the reduction of low-value buyers could pressure our rolling 12-month active buyer count in the coming quarters,” Priest said.

However, the eCommerce company also reported that GMV was down 12% in the third quarter, to $19.5 billion, and down 8% in the U.S. specifically, with sold items globally declining 21% year over year. Compared to 2019, global GMV grew by 9%, and U.S. GMV was up 22%.

Read more: eBay Downplays Continued Decline of Active Buyers

StockX’s Strength

CEO Jamie Iannone told analysts, though, that eBay’s advantage over other platforms is “the cross-category nature of shopping,” with the average buyer who purchases sneakers on eBay spending approximately $2,000 in other categories.

“It really is about both leaning into the high-value buyers who are on the platform, as well as attracting new buyers,” he said.

But StockX, though known best for its sale of sneakers and streetwear, also carries other clothing and accessories such as handbags and watches, and in 2017, the platform surpassed eBay in total sneaker transactions. In 2020, the platform recorded 7.5 million trades and $1.8 billion in GMV, with over 200 million visitors across the year.

Earlier this year, StockX reached a valuation of $3.8 billion.

See: StockX Achieves $3.8 Billion Valuation With New Round

“Fundamental shifts in both consumer buying and investing behavior provide an immense growth opportunity for StockX, which has long lived at the intersection of consumer goods and tradable assets,” StockX CEO Scott Cutler said in the announcement about the new valuation. “We are just scratching the surface of what StockX can deliver for the millions of global buyers and sellers who count on the platform for a wide range of authentic current culture products.”

Related: Retailers Use AI to Build Trust in Secondhand Luxury, Sneaker Sales