While eBay’s second quarter results were stellar, the event was more notable for the unveiling of new CEO Jamie Iannone’s vision for the company.
By the numbers, the pandemic-driven digital shift has been good for the company, as revenue for the quarter was $2.9 billion, up 18 percent over 2019. Annual active buyers grew by 5 percent — an addition of 8 million new buyers for the quarter — bringing the total to 182 million global buyers. Gross merchandise volume also rose 26 percent year over year to $27.1 billion.
It was the company’s first earnings announcement since agreeing to sell its classified-ad unit, a transaction expected to close in 2021’s first quarter. It’s also the first announcement since the end of eBay’s operating agreement with PayPal, which expired July 17. The company’s new managed-payments platform has processed $4.7 billion so far, according to the company’s earnings statement.
“Although the original operating agreement reached the end of its term, PayPal will remain an important partner moving forward as a payment option for buyers,” Iannone said on the earnings call.
The CEO used most of the call to elucidate his three-point plan for eBay since his appointment three months ago amid a boardroom fight over returning the company to its marketplace roots. Iannone used the phrase “technology-led reimagination” several times during his comments.
“Put simply, our vision is to build on the company’s powerful strengths to become the best global marketplace for buyers and sellers through a tech-led reimagination of eBay,” he said. “While there are many accomplishments to be proud of, we are not satisfied with where we currently stand. The reality is that in the past few years, we have not executed to our full potential. New competitors have taken share because we neglected our core area of expertise. We focused on new areas that could not drive sustainable or profitable growth, and to be candid, we did not adapt quickly enough to the rapidly changing needs of our customers. This leaves us with enormous untapped potential that we absolutely must capitalize on.”
Iannone’s three key priorities for the company are: build compelling next-generation experiences for high-volume buyers; become the partner of choice for sellers; and cultivate lifelong, trusted buyer relationships. Iannone spent the most time on the second priority and said he sees more small businesses selling on the eBay platform.
“We will treat them like true partners by making the platform easier to use,” he said. “We will help them grow their brand, drive their sales and carefully protect their reputation by making eBay more compelling. We plan to grow the number of successful businesses on the platform. Hundreds of thousands of small businesses are already active today, and tens of thousands have recently joined do programs … across our global markets. Recently we launched several improvements to simplify registration and help sellers start and succeed on the platform. Additionally, we have boosted seller presence by launching storefronts in the mobile app.”
The app is an important component of the Iannone’s plan, and he said he sees it as the best way to drive more purchase frequency, longer relationships and loyalty among buyers.
“We will continue to invest in the buyer experience and marketing technology capabilities as we work to foster lifelong trust in relationships with buyers,” Iannone said. “As we look forward, we have a clear vision to realize the enormous untapped potential of eBay.”