eBay’s Marketplace Transaction revenue is a major focus for senior management and investors. In 2016, Marketplace Transaction revenue grew 3.2%, and in the company’s most recent 1Q results, the segment grew 3.1%. This was an improvement from prior years, but the segment continues to lag the broader growth underway in ecommerce.
Improving User Experience
Management has numerous initiatives underway to improve its marketplace and drive growth acceleration. Primarily, management is focused on using structured data to improve the user experience and deliver more personalized content to each user’s needs. The company is also rolling out a new updated mobile app, increasing its brand marketing, and introducing a new Guaranteed Delivery program where items will be delivered in 3 days or less for free.
These initiatives have already shown some signs of traction. Last month, eBay reported 1Q17 results that showed an acceleration in YoY active buyers and US Gross Merchandise Value (GMV) growth.
Analysts are modeling an even greater degree of improvement in the back half of the year due in part to these initiatives. Consensus estimates for global GMV show a sequential acceleration through the year up to 5.9% in 4Q17.
The global GMV improvement drives a similar sequential acceleration in overall Marketplace Transaction revenue throughout the year. And since Marketplace Transaction revenue made up 78% of total revenue for the company in 2016, this drives an acceleration in overall eBay revenue growth as well.
With these expectations baked into consensus estimates, investors will now be looking for the initiatives to contribute to revenue growth acceleration in the coming quarters.