SAN JOSE, United States — Ebay Inc. is struggling in its effort to carve out a unique place in an e-commerce industry dominated by Amazon.com Inc.
Chief Executive Officer Devin Wenig’s decisions to increase spending on marketing, redesign Ebay’s homepage to personalise products for each visitor and make it easier for users to navigate the site’s 1 billion listings produced a sales gain of 3.7 percent in the first quarter, similar growth to the prior period. His goal, almost two years after the company’s split with payments business PayPal Holdings Inc., is to make Ebay a go-to for unique items not found on Amazon.
Revenue in the current quarter will be $2.28 billion to $2.32 billion, San Jose, California-based Ebay said Wednesday in a statement. Analysts on average estimated $2.32 billion, according to data compiled by Bloomberg. Adjusted earnings per share will be 43 cents to 45 cents, compared with analysts’ projections of 47 cents.
First-quarter profit was 49 cents per share on revenue of $2.22 billion. Analysts on average estimated 48 cents on sales of $2.21 billion, according to data compiled by Bloomberg.
“This is not a good turnaround story when you hope to see these initiatives leading to improved performance,” said James Cakmak, analyst at Monness Crespi Hardt & Co. “No matter how you slice it, they’re losing market share not just to Amazon, but to the overall industry, even after spending all of this money on advertising.”
The company gained 2 million active buyers in the first quarter to 169 million, a 4 percent gain from the period a year earlier. Gross merchandise volume, which is the value of goods moved through transactions, gained 2.4 percent to $20.9 billion, about the same growth as the previous quarter.
Ebay’s shares fell as much as 4.5 percent in extended trading before rebounding to gain about 1 percent. The stock closed at $33.85 in New York and has gained 14 percent this year.
Ebay is looking to speed up sales growth, which has lagged behind that of e-commerce leader Amazon and faces increasing pressure as Wal-Mart Stores Inc. invests in online sales. Shoppers are continuing to shift their spending from stores to websites. E-commerce spending in the US will represent 13.9 percent of all retail sales in 2021, up from 9.2 percent this year, according to estimates from EMarketer.
Ebay plans in the next several months to introduce a three-day delivery guarantee on millions of products. That’s slower than Amazon’s two-day delivery offered for Amazon Prime shoppers who pay $99 a year to subscribe to the fast shipping program.
The company also is looking abroad and earlier this month invested $500 million in Flipkart Online Services Pvt. that is part of a partnership with the e-commerce leader in India that allows merchants to offer products on both websites. The Flipkart deal is an example of Ebay’s effort to increase cross-border online commerce as another way of surviving in a world dominated by Amazon.
The company gets the lion’s share of its sales from international markets, such as the UK, Germany, Australia and Korea, and cross-border business from China, but the US still accounts for about 44 percent of revenue.
By Spencer Soper; editors: Jillian Ward, Andrew Pollack, Molly Schuetz.