By: eBay Strategies
January 19, 2012 at 08:55 AM EST
Peeling the onion on eBay's 2011 Q4 results
Last evening, January 18, 2012, eBay released their Q4 2011 results. Here is how eBay did across the metrics we follow in the World of eBay Marketplaces: While we don't cover it, PayPal continues to do very well and the...
Last evening, January 18, 2012, eBay released their Q4 2011 results.
Here is how eBay did across the metrics we follow in the World of eBay Marketplaces:
While we don't cover it, PayPal continues to do very well and the GSI unit over-performed as well. And with the eBay Marketplace, everything about the Q was very solid and ahead of expectations, with the exception of GMV growth in the US (in-line at 10% and below e-commerce's 15%) and Intl (below expectations at 9%). I'm sure these results will continue the drum beat of people suggesting the company should split eBay marketplaces and Paypal.
A deep-dive on eBay marketplace growth
One interesting part of the Q that sellers are already picking up on is this: "If GMV grew at 10% how did revenue grow at 16%?" The answer is that eBay's effective 'take rate' (the % of revenue they make on GMV) went up pretty strongly for the Q - coming in at 7.9% (marketplaces) and 3.71% (paypal) for a total take rate of 11.61%. There are a couple of factors that drive this:
That explains the disconnect between revenue and GMV, now let's look at why GMV came in at/below expectations for the Q.
Whenever we look at GMV growth we find it helpful to look at the category data. Here's the eBay category data for Q4 - sorted by y/y category growth and color-coded - green grew faster than e-comm, yellow grew around e-comm and red was below 10%.
When you think of the eBay marketplace as a portfolio of categories (which it is and is increasingly becoming more siloed), you get a better feel for where eBay is making inroads and where they are losing share in e-commerce. As you can see there are only two categories that grew faster than e-commerce (BI/H+G) and 9 categories were moderate and ten categories that lagged.
Vehicles have been problematic for years so no surprise there, but some of the categories point to erosion from competition (most likely Amazon you would have to assume) such as BMV and Video Games. It's also interesting that CE and Musical Instruments had a tough Q.
Jewelry and Coins had been on a huge spike, presumably due to the melt-value price of gold and other precious metals, but growth from that trend seems to have either annualized or decreased.
It will be interesting to see if eBay's increased verticalization strategy on CE will help turn around the category and if they can get CSA to grow faster than 11% with the concerted effort on eBay Fashion in 2012.
Finally, we've mentioned that our SSS for auto-parts is north of 50%. Our customers tend to all have adopted eBay's fitment feature in that category which is probably a core driver of the super-sized results for that set of ChannelAdvisor customers.
Why was eBay's GMV growth so far off the ChannelAdvisor data?
In Q4, our customers at ChannelAdvisor as reported in our SSS data had a great Q on eBay - growing ~18% for the Q and hitting a record ~22% in December. We've covered this in the past, but I thought it was important and timely to cover why there is a pretty big 8% gap (10% vs. 18%):
Other interesting datapoints
Combing through the news release, conference call and analyst reports, here are a couple of other interesting tidbits:
All in all, this was a great Q for eBay and they are already focused on turning around some of the categories with lagging growth. Amazon doesn't report until January 31st, so stay tuned for coverage of their results on sister-site, AmazonStrategies. We have been holding a ton of interesting posts and topics such as (PayPal POS vs. Gwallet from NRF, details on eBay's new search engine, Cassini, and an update on Groupon Goods), stay tuned.
What did you think about eBay's Q? Sound off in comments, or yell if you have questions.
SeekingAlpha disclosure - I am long Google and Amazon. eBay is an investor in ChannelAdvisor where I am CEO.
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