In the crowded marketplace of marketplaces where the headlines are increasingly dominated by Amazon and Alibaba, it's easy to start comparing what appears to be apples to apples.
But as eBay CEO Devin Wenig said during the company's third quarter earnings results yesterday (Oct. 21): "We don’t want to be like anyone else, and we don’t think that our brand is like anyone else's."
And following its split from PayPal (which remained but a minor highlight in its quarterly update), eBay's results show that its new leader may be taking the marketplace where it needs to head. After all, eBay's past few earnings results showed that eBay's marketplace was sagging, which had plenty of analysts projecting a pretty dismal life post-PayPal.
Turns out, things might not be that bad.
Leading the way for eBay's potential growth is its investment in its structured data initiative, which is eBay's plan to help its products be better indexed and better optimized in order to draw in new buyers and help its seller base sell more goods.
Wenig recognized it's only just the start to regain the foothold it lost as a result of the headwinds that came from Google's SEO switch-up, which interfered with how eBay's results showed up in search. Analysts were reminded on the earnings call that it’s a long-term project but a necessary step to "deliver a more robust commerce platform [that] will be built on a solid foundation of structured data."
“Ultimately, both SEO and frankly discoverability on eBay are crying for persistence. They are crying for us to understand that just because a listing comes and goes, we’re still selling thousands of [products]. So that, at the end of the day, is why having a persistent view of the products we sell, I believe, is a traffic driver, and it's a conversion driver because, ultimately, we have 800 million items for sale. This is the world’s biggest store," Wenig said.
"It can be overwhelming, and we’re asking too much of search. Search is very important, but for search to be the only lever to pick through 800 million items is becoming not sustainable, and ultimately, it causes a reduction in conversion."
What the structured data plan aims to do is group items in order to help better organize its categories that offer more of a value add to customers who are trying to sift through eBay's massive marketplace. In turn, sellers may get more relevant eyeballs, and buyers have the chance to conduct more cross-channel purchases without having to leave the marketplace.
"We are collecting product data from our sellers as they list their inventory on our site. On June 29, we started requiring product information from our sellers across 18 categories in the U.S., the U.K., Germany and Australia. We’ve seen positive reception and adoption in line with our expectations — with limited disruption to the listing process," Wenig reported about the progress so far.
What's next for eBay's structured data plan is to add more countries, more categories and eventually expand the requirement (where relevant) to more categories by 2016. From there, eBay plans to leverage machine learning of that data in order to leverage it for a better user experience. And in 12 weeks since it launched, eBay has 27 million new listings that have been successfully mapped and inventoried on its database, and 5 million new products have been added to its catalog.
"Getting a product identifier is most useful to us after we associate that product information to similar products in our catalog and bring in additional data related to the product, such as descriptions, pictures and reviews," Wenig explained.
Wenig also spoke briefly about eBay's free shipping subscription program, eBay+ (its Amazon Prime competitor), that's currently being piloted in Germany. The service will require participating merchants to ship out products on the same day if a purchase is made by 2 p.m. For now, all Wenig clued analysts in on is that the company is ramping up the pilot program that offers free, expedited shipping, free returns and eventually exclusive access to promotions.
"We’ll also promote within this subscription the ability for consumers to sell without fees — hence driving not only buying velocity but also the unique eBay sell-to-buy flywheel," Wenig said.
While eBay's executives recognized that the marketplace has a steep hill to climb to achieve its overall goals to drive new buyers to its site and continue to attract sellers, Wenig remained bullish on eBay's business model and its potential for growth.
“We don’t want to be like anyone else, and we don’t think that our brand is like anyone else's. And because of that, the ability to acquire unique inventory through unique sellers — both consumers and small and medium-sized businesses — is square in the center of where we are focused," he said.
With respect to mobile, which in the past few quarters has also been a major talking point for eBay, Wenig gave some indication about eBay's long-term strategies and how it plans to continue offering a more unified consumer experience across all devices. EBay doesn’t break out its number of mobile users or mobile GMV in its earnings.
"We’re running the company for the long run, and some of the things we’re doing are really fundamental, and it tends to be that in marketplace ecosystems like this, fundamental things may not be growth-friendly in the short run, but they are important in the mid to long run. Mobile is one of those. I don’t have an exact timeframe, but you’re already seeing the beginning of recovery," he said.
In terms of actual earnings figures, eBay's GMV grew 6 percent on an FX-Neutral basis on the quarter that saw a revenue of $2.1 billion (down 2 percent), YOY. GMV hit $19.6 billion, which was a 2 percent decrease on an as-reported basis. In the U.S., GMV grew 3 percent, but internationally GMV was down 5 percent on an as-reported basis. EBay's active buyer base grew 5 percent on the year to 159 million.
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