Great callout here from FidoMaster about the lack of a buyer-growth chart in the Q1 2022 earnings deck....luckily, he's got you covered. 😉
The lack of active seller numbers for the quarter is very interesting too...did they just think we wouldn't notice?
Note from Liz: Opinions expressed are mine alone and should not be taken as financial advice.
As usual, I'll leave the financial analysis to experts in those fields and instead focus on highlights, insight and commentary from an experienced seller perspective.
Important stats from the press release:
- Revenue of $2.5 billion, down 6% on an as-reported basis and down 5% on an FX-Neutral basis
- Gross Merchandise Volume of $19.4 billion, down 20% on an as-reported basis and down 17% on an FX-Neutral basis
- Active Buyers down 13% from 163 million in Q1 2021 to 142 million in Q1 2022
CEO Jamie Iannone missed some key opportunities both in prepared remarks and Q&A segment to highlight plans for expansion of the focus vertical playbook.
In Q1, we launched authenticity guarantee for ungraded cards above $750. Just this week, we expanded authentication to cards by signing a strategic partnership with PSA, the global leader in trading card grading and authentication. We expect this partnership will increase customer satisfaction and result in more GMV growth.
It's interesting Jamie is sticking with the $750 figure - they started at $750 in January, dropped to $500 in February, then $350 in March and down to $250 in April.
Jamie also mentioned computer vision technology for cards, a feature that was rolled out May 2021 and to my knowledge has not been meaningfully updated or expanded on since.
A year later and eBay still does not support scan to list for sports cards, only to Pokemon, Magic the Gathering and Yu-Gi-Oh card games.
Meanwhile, I'm hearing some interesting buzz about CollX.
On handbags, he mentioned adding men's bags to authentication recently, but not adding in both women's and men's wallets as well.
Stephen Ju from Credit Suisse asked:
Your commentary about expanding the authenticated brands and bags is interesting. Sounds like you're not quite done going deeper into the category. And also kind of along with that, can you talk about how parts and accessories rollout proceed? I mean is it going to be a gradual rollout of a category-by-category, a model-by-model basis?
Jamie simply repeated existing stats about sneakers, watches, handbags and trading cards, completely missing the opportunity to show the above examples of going deeper into those categories.
Parts & Accessories? He didn't even answer that part of the question.
In his prepared remarks, Iannone said:
We have been investing in full funnel marketing for parts and accessories since December, and we are starting to see modest gains in initial consideration.
They've been saying Motors Parts & Accessories is going to be the next vertical focus since May 2021. Then in Q3 21 they said they were really starting to rev up the vertical playbook by adding P&A to the eBay Motors app.
Really Jamie, modest gains in initial consideration is all you have to show at this point? Not to mention those marketing efforts...some of them haven't gone so well.
There was nothing significantly interesting or new about payments. Spendable funds has started to roll out to a small number of users and the first phase of on demand payments is available, but it still requires 1-3 days of processing time to reach your bank account.
No mention of instant payout to debit card for a fee or wire transfers and split payments for high ASP transactions Chief Growth Officer Julier Loeger mentioned at Investor Day.
Unpaid items were noticeably absent from the discussion as well. In past earnings calls, Jamie has talked extensively about how they have "virtually eliminated unpaid items" for Buy It Now - now that's done, he doesn't appear to want to talk about the still rampant unpaid problem in auctions.
He says the other "new" product is External Promoted Listings.
The second product, External Promoted Listings, is now open to our entire global seller base. Similar to standard Promoted Listings, sellers choose the value of their ad spend.
It's an interesting pivot - when External PL was first introduced in July 2021, it was positioned as simply an extension of the existing Promoted Listings Standard.
It's not "similar", it's the exact same product - this just expanded visibility for Promoted Listings Standard to external sources rather than exclusively within the eBay network.
I guess when you can't innovate, you can always just rewrite the story, right Jamie?
I said it in the Q4 21 call and I'll say it again here - I don't know why they are still calling Promoted Listings Advanced CPC a "beta program" in the "nascent stage" at this point considering it has been a slow roll out since Q2 21.
There may still be enhancements to come but it is a fully fledged active product available to and being used by many sellers at this time.
Meanwhile, no mention of the new ad product for Stores that VP Ads Alex Kazim briefly mentioned at Investor Day.
Several analysts were concerned with the slowdown in ad revenue. They may be right to be concerned with troubling reports of Promoted Listings being blocked by ad blockers and massive seller confusion and pushback on recent changes to the Marketing Terms.
Tech Led Reimagination & New Tools/Features
Iannone pointed to new storefronts as an example of how quickly they are moving along the tech led reimagination path.
Stores is really the opportunity to let sellers build a brand and communicate with buyers. So this quarter, we launched the new storefront on -- for our eBay store sellers.
Sorry Jamie - the "new stores" transformation is not a Q1 22 win - you've literally been working on this since July 2021. About Video in Stores happened in November 2021.
Yes, there were a few minor additions in Q1, but there are also several promised features from the Fall Update in September that still have not seen the light of day with "no updates available" like a store newsletter signup button on the About page.
Coupons for buyer groups? We've been waiting for that one since October too and now that it's finally here, it's also missing several key promised features like segmenting by repeat buyers and followers.
Iannone was asked about Chief Product Officer Pete Thompson departing and being replaced by Eddie Garcia.
Jamie, you welcomed back Eddie Garcia in your prepared remarks, and that's a change that's happened since we last saw you all at the Investor Day. Could you elaborate maybe a little on the transition from Peter Thomson to him?
And is there any new particular direction or the initiatives that you expect Eddie to lead as he takes over responsibility for your product, put a stamp on so to speak?
His very confusing answer was:
I went out and tried to find the absolute best product person in the world that I can find. Eddie has a really unique ability. He combines product UX and technology like no other executive that I've met...
...I would say no, nothing changes in terms of the product road map. He's got a great team of leaders underneath him. We have a strong organization, and the road map is very solid for the year...
...So I'm happy with our pace of innovation across the board. I'm just thrilled that Eddie could be part of the leadership team and help us push forward on the tech-led reimagination.
Wait a minute Jamie - you re-hired Eddie Garcia because he's the "best of the best of the best, with honors" and brings a unique set of skills to the table but then you're not going to let him deviate from the roadmap set by the previous guy...but then you're excited about how his leadership will bring innovation and push forward the tech led reimagination?
Holy mixed messages, Batman! 🤯
Richard Kramer from Arete had an interesting question about social commerce, it's too bad Jamie didn't actually answer it.
Jamie, you mentioned quite a bit about the focused strategy and laying that out, but still seems to leave eBay vulnerable to vertical sites in specific categories, which have some social or community hosting to engage users.
How far might you see stores evolving to allow them to have their own maybe brands or IDs and try to engage users in more ways than simply buying?
Iannone's answer pointed to the new Messaging experience in the app and About videos for Stores - completely missing the all important "social" aspect of the kind of social commerce the question was actually about.
One to one "text messaging" between a buyer and a seller is not social commerce, Jamie and neither is a pre-recorded About video that may tell a brand story but doesn't allow users to engage real time in meaningful interactions with sellers and other enthusiast buyers about the things they love and want to buy or sell.
What about the live selling feature mentioned at Investor Day or the discounted final value fee incentive mentioned at eBay Open in August that is just now finally being tested out in Australia?
Whatnot and other sites are quickly leaving eBay in the dust on these types of social commerce features and Jamie doesn't even seem to understand the question.
Justin Post from Bank of America asked:
There's been a lot of write-downs in the group. And obviously, the e-commerce group is under pressure. You have the advantage of really strong cash flow. How are you thinking about the asset opportunities, bringing things into eBay?
Jamie answered, in part:
We continue to look at build, buy and partner in those opportunities...and we continue to look at opportunities that we think will help push that further in terms of new features, new functionality or new audience.
That would have seemed like a great time to mention eBay's nascent venture capital initiative, opening up opportunities to identity and nurture the "next big thing" in ecommerce which could be part of that "build, buy and partner" strategy in the future.
I'll just put my thoughts from Q3 and Q4 on repeat - the tech led reimagination has slowed beyond a crawl, the vertical focus is out of touch with the vast majority of sellers, and eBay is showing no signs of pulling out of the death spiral of lost buyers.
If you want to see what other sellers are saying, check out this eBay community thread.
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