eBay reports modest growth in Q1 (EBAY)

This story was delivered to BI Intelligence "E-Commerce Briefing" subscribers. To learn more and subscribe, please click here.eBay reported $2.2 billion in total revenue for Q1 2017, up 4% year-over-year (YoY), with gross merchandise volume (GMV) ' the total value of goods sold on eBay ' advancing2% YoY to $20.9 billion, according to TechCrunch.The modest growth is a positive sign for eBay as it faces increasedcompetition after its separation from PayPal, which had been the company's growth engine.eBay has been spending more to fuel growth since its split from PayPal, leading its operating margins to drop to 25% for Q1 2017, down from 29% in Q1 2016. Much of that spending went into new advertising efforts that helped lure 2 million new active buyers during the quarter, bringing total active buyers to 169 million.The company also unveiled a new shipping program that provides free delivery within three days on 20 million items, and is investing heavily in standardizing data related to product display and categorization to make items easier for customers to find. The data initiativeswill also make it easier for eBay to use machine learning to personalize customers' product searches based on their buying patterns and interests.In addition, the company ismaking a concentrated effort to expand geographically, as well as through investments and acquisitions. It acquired Ticketbis, an online ticket marketplace based in Spain, last year, which allowed eBay's StubHub ticket marketplace to expand into Europe, Asia, and Latin America. This helped StubHub grow its revenue 18% YoY inQ1 2017 to $210 million. eBay also recently took an equity stake in Flipkart, the e-commerce leader in India, investing $500 million in the company as part of a deal that included Flipkart acquiring eBay's India business. In addition, the two companies agreed to pursue exclusive cross-border e-commerce agreements with each other, which could help the two of them compete with Amazon in both the US and India. These efforts could help provide short-term growth, while eBay's investments in data, machine learning, and logistics will likely take awhile to pay off.To receive stories like this one directly to your inbox every morning, sign up for the E-Commerce Briefing newsletter.Click here to learn more about how you can gain risk-free access today.Join the conversation about this storyNOW WATCH: How to know if Snapchat stock is a buy or a sell
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