eBay Inc. (EBAY – Free Report) is a well-established player in the e-commerce space and also has a first-mover advantage. To maintain its dominance, eBay has introduced several measures to fuel growth in its Marketplaces business.
eBay has been giving more data to its marketplace sellers. These data include price guidance, restocking guidance and more insight into inventory such as demand signals for the right products, price and timing. Additionally, eBay continues to increase user engagement and satisfaction by driving traffic to its top-rated sellers. As a result, same-store sales at these retailers continue to grow at a healthy rate. The company expanded the use of social channels, which is significantly increasing traffic growth.
Also, Raymond James’ analyst Aaron Kessler remains encouraged by the company’s growth in its marketplace business. He believes that platform changes, product innovation and promoted listings will help in driving the Marketplace business in 2018. Consequently, the analyst has upgraded its rating based on the company’s growth in its marketplace business.
Following the upgrade, eBay’s shares were up 1.61% to $42.95. In a year’s time, the stock has gained 29.2% underperforming its industry’s growth of 65.7%.
He believes that gross merchandise volume (GMV) growth will continue to accelerate this year driven by enhancements to the buyer experience. In the recently reported fourth quarter, Marketplace GMV grew 9% year over year on a reported basis and 6% on an FX-Neutral basis.Total GMV of $24.4 million grew 10% from the prior-year quarter on a reported and 7% on a Fx-neutral basis.
The analyst believes that the company’s Promoted Listings product will be accretive to earnings in 2018. In the last reported quarter, nearly 160,000 sellers used promoted listings to advertise more than 100 million items. That accounted for 50% of sequential revenue growth in the fourth quarter.
