eBay, a stalwart in the online retail arena approaching its third decade, is facing a stagnation challenge in retaining its core user base. Despite boasting 16 million enthusiast buyers, a term denoting the platform's most devoted and high-spending users, this figure remains unchanged over the past three quarters and has seen a decline from 17 million in 2022 and 18 million in 2021.
eBay, a stalwart in the online retail arena approaching its third decade, is facing a stagnation challenge in retaining its core user base. Despite boasting 16 million enthusiast buyers, a term denoting the platform's most devoted and high-spending users, this figure remains unchanged over the past three quarters and has seen a decline from 17 million in 2022 and 18 million in 2021. These enthusiasts represent a crucial segment among the 132 million individuals who engaged in transactions on eBay in the last twelve months.
CEO Jaimie Iannone, who took the reins in 2020, has shifted the company's strategy away from direct competition with Amazon. Instead, eBay's primary focus is on preserving its dedicated user base, known for investing significantly in items such as baseball cards, vintage clothing, and rare collectibles. Analysts view this return to eBay's roots as a strategic adjustment, deviating from previous attempts to compete head-to-head with Amazon.
Emphasizing its commitment to maintaining a loyal customer base, eBay has transitioned away from promoting new, in-season items on its platform. Iannone clarified that eBay is not positioned as a long-term contender for such purchases, recognizing that consumers prefer Amazon and Walmart for these acquisitions. The company is no longer fixated on the total number of active buyers, diverting attention from "low-value buyers" and "one-and-done buyers."
While the number of eBay's super-buyers has diminished by over 10% to 16 million in the past two years, the company remains dedicated to retaining its most valuable shoppers. Enthusiast buyers, as highlighted in a presentation to investors, spend nine times more than the average shopper, constituting 71% of gross merchandise value. These enthusiasts make approximately 30 purchases a year, collectively spending around $3,000.
Authentication has become a cornerstone of eBay's efforts to instill trust. Introducing its authentication program in 2020 for high-value items like watches, eBay has expanded this feature to cover sneakers, handbags, trading cards, jewelry, and streetwear. The platform employs 200 individuals who review 5,000 products daily, augmented by the recent acquisition of Certilogo, an AI-powered authentication company specializing in apparel.
In addition to authentication, eBay has implemented user-friendly features, including tools to verify if a car part fits a vehicle, a secure facility called "The Vault" for collectors, live selling through livestreams, and a site redesign with larger images and streamlined information presentation.
Despite these efforts, eBay faces challenges from nimble competitors like StockX and TheRealReal, which have seized market share with authentication as a core offering. Analysts express concerns over eBay's pace, urging a faster rollout of authentication features across more categories. The company aims to achieve this in 50% of its gross merchandise value by the end of 2024, but analysts predict a likely delay until at least the end of 2025.
As eBay grapples with a shrinking customer base and diminishing sales, its early indicators suggest progress, particularly in the car parts and accessories segment. Momentum in this business, marked by mid single-digit sales growth for three consecutive quarters, follows the introduction of the 'guaranteed fit' program helping shoppers determine if a part suits their vehicle. eBay is extending this program to the U.K. and Germany, its second and third-largest markets after the U.S.
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