Ebay Inc. reported revenue grew 5% to $2.54 billion in its fiscal second quarter ended June 30, 2023. The marketplace’s gross merchandise value (GMV) decreased 2% to $18.2 billion for the quarter.
That’s an improvement from being down 3% in Q1, said Stephen Priest, senior vice president and chief financial officer, on a July 26 earnings call with investors.
Ebay active buyers dropped by 1 million quarter over quarter, totaling 132 million, Priest said. Buyer count — for both new and returning buyers — has also grown year over year for four straight quarters, he said. The number of “enthusiast” buyers was stable in Q2 at 16 million, he said. Spend per enthusiast grew year over year, averaging roughly $3,000 annually. However, he did not specify how much that spend has grown.
President and CEO Jamie Iannone also said advertising revenue reached 2% penetration of GMV, “a major milestone.”
“Total ads grew 35%, while first-party ad revenue grew roughly 50 points faster than GMV,” Iannone said.
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Iannone added that Ebay introduced in its fiscal Q2 a new way to rank ads on search that leverages its in-house artificial intelligence (AI) capabilities. The method optimizes cost per acquisition placements for both conversion and ad rate, he said.
Ebay ranks No. 6 in Digital Commerce 360’s new 2023 Global Online Marketplaces Report. The Global Online Marketplaces Database ranks the 100 largest such marketplaces by 2023 third-party GMV.
Ebay GMV
In the United States, Ebay GMV decreased 4% in Q2, Priest said. International Ebay GMV grew 1%, he said.
“Enabled by artificial intelligence, we will fine-tune the breadth of inventory and other aspects of the shopping journey to cater to the varying needs of new buyers, infrequent shoppers and Ebay enthusiasts,” Iannone said.
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He said Ebay began rolling out changes on the consumer-facing side in recent months. Those started with “testing a more modern and intuitive view item page, which is the most visited page on Ebay,” Iannone said.
The updated Ebay item page offers:
- A streamlined appearance.
- Larger and higher resolution images
- An optimized information hierarchy.
“Early tests indicate a measurable uplift in GMV versus our existing design,” Iannone said.
” eBay has 5 categories that each generate more than $10 billion annually in GMV, making up more than 80% of volume on our marketplace in aggregate.” Iannone said.
Those categories are:
- Motors parts and accessories
- Electronics
- Collectibles
- Home and garden
- Fashion
Iannone said the marketplace is investing in “improved in-house risk modeling to alleviate transactional friction for sellers and buyers on Ebay.” That has lifted conversion, he said without disclosing details. It has also led to “hundreds of millions of dollars of incremental GMV during the first half of 2023 alone,” Iannone said.
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Ebay embraces AI
Ebay has been implementing AI in different parts of its business.
Iannone said over the next few quarters and years, Ebay expects advancements in artificial intelligence, including generative AI, to impact “nearly every aspect of our organization.” He said the advancements will drive meaningful efficiency and productivity improvements.
He also said Ebay’s recent acquisition of Certilogo will expand Ebay’s fashion category. Certilogo provides AI-powered authentication for apparel.
Iannone said Certilogo empowers brands and designers to:
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- Manage the life cycle of their garments.
- Protect their customers from counterfeits.
- Encourages ecommerce via QR codes that serve as digital product passports.
Using AI for inventory
Moreover, Iannone announced a new feature called Magical Listing. He said it will make it “significantly easier” for sellers to list their inventory.
“One of the biggest challenges to operating a listings-based marketplace is the burden on sellers to fill in descriptions and item aspects for their products,” Iannone said. Magical Listing launched in May, he said. The feature “dramatically reduces this friction for our sellers via AI-generated item descriptions.”
“We integrated Azure’s open AI API into our core listing flow,” Iannone said.
Ebay sellers can choose to have generative AI instantly populate detailed product information, he said. It would use the product’s title, category and any item aspects that have been input, he added.
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In Q2, Ebay enabled more than 50% of iOS and Android users in the U.S. to test this beta feature. Iannone said he expects to reach 100% in the coming weeks. About 30% of users have tried the feature at least once, he said.
“Early signals have been extremely positive,” Iannone said. “We’ve observed acceptance rates of over 90% for AI-generated descriptions, including those with edits.
“Customer satisfaction is over 80% thus far, which is among the highest CSAT for any new feature launched in recent memory. Sellers have told us that this feature will unlock more of the unique inventory in their closets. And on average, we are seeing description lengths double when gen AI is used.”
Furthermore, Iannone said Ebay is “just getting started” with Magical Listing.
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“The next iteration of our Magical Listing will leverage our improved image recognition capabilities to provide flows with the option of a more seamless camera-based listing,” Iannone said.
Authentic and certified fashion products
Ebay launched Authenticity Guarantee for streetwear in the U.S. in June. It is now authenticating new and pre-owned streetwear items from 20 trusted brands, Iannone said. It has since expanded eligible streetwear in July.
Among the Ebay-certified brands:
- Adidas
- Jordan
- Nike
- Supreme
- Kith
- Off-White
- Palace
Ebay plans to expand coverage to luxury brands later in the year, Iannone said. Those include Gucci, Prada, and Louis Vuitton.
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“This marks our entry into authenticated apparel, a category that has strong overlap with our passionate community of sneaker enthusiasts, adding another layer of trust when they shop,” Iannone said.
Ebay also launched a Certified by Brand program in April. Iannone said the marketplace expects this to facilitate more ecommerce in the luxury space. There are already more than 20 brands participating in this program, he said. They offer new and certified preowned inventory across the watch, jewelry and handbag categories.
Listings from this program will show a direct-from-brand or brand-authorized seller badge, which he said brings an enhanced level of trust to these listings similar to visual trust signals for Authenticity Guarantee.
Ebay earnings summary
For the fiscal second quarter ended June 30, Ebay Inc. reported:
- $2.54 billion in revenue. That’s up 5% from $2.42 billion in the year-ago period.
- Ebay GMV decreased to $18.2 billion. That’s down 2% year over year from $18.55 billion.
- Ebay active buyers decreased 4% year over year.
Percentage changes may not align exactly with dollar figures due to rounding.
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