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eBay Predicts “Continued Strong Growth” After High-Performing Quarter

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By Published On: July 20, 20180 Comments

eBay has released its financial results for the first half of 2018, revealing $2.6 billion in net revenue for the period ending June 30, 2018.

Announcing its second-quarter results on Thursday, eBay reported a growth of nine percent, as it finished June with $2.6 billion in net revenue. According to the e-tailer, this strong growth was primarily driven by an increase in gross merchandise volume (10 percent), generating $23.6 billion in sales. Devin Wenig, the president and CEO of eBay also believes the successful execution of the online marketplace’s updated strategies are also to thank for its Q2 growth.

“In Q2 we continued to execute our strategy, making improvements to the core eBay experience. At the same time, we pursued significant opportunities in advertising and payments,” he said in the results statement.

Over the quarter, active buyers on the platform also grew by four percent, upping the number of regular eBay shoppers to 175 million across the globe, while the company generated $372 million of operating cash flow and $188 million of free cash flow from continuing operations.

eBay also repurchased roughly $1 billion worth of its common stock (26 million shares) prior to June 30, with authorisation to reclaim a further $5.7 billion worth, should the company wish to do so, as part of its continued buy-back scheme.

It’s been a big couple of months for eBay both in Australia and around the world, as the company introduced a number of initiatives to compete with Amazon, and decided to re-open its Indian operations after Walmart finalised a $US16 billion deal to acquire a 77 percent stake in the country’s fastest-growing e-commerce platform.

After the sale was confirmed, eBay announced its plans to offload its own shares in Flipkart, with a gross value of roughly $1.1 billion. After the close of this transaction, the company intends to finish its strategic partnership with Flipkart and reinvest in the cross-border trade opportunity India presents, by re-launching its own local operations.

The past few months have also seen eBay up its ante in its ongoing battle against the goliath that is Amazon. While eBay remains the most popular marketplace among Australian consumers, Amazon is actively increasing its Australian footprint and is the dominant e-commerce player in key markets like the US and UK.

To compete, eBay recently launched its own membership program to rival the likes of Amazon’s Prime, aptly named eBay Plus, and has begun launching both exclusive members sales and offers, as well as site-wide specials that are accessible to all consumers.

Fulfilment and logistics have also become a key focus for the online business, as eBay banned its sellers from utilising the services of Fulfilment by Amazon when it was launched in Australia earlier in the year, only to open its own order fulfilment service in partnership with Australia Post at the start of July. Guaranteed Delivery was also offered to give consumers ease of mind when ordering products from third-party sellers on the platform.

With all of these measures, as well as initiatives like its price beat guarantee in the US, eBay is confident it will continue to see strong results for the remainder of 2018.

“As we look ahead to the second half of 2018, we expect acceleration in our core business and continued strong growth in earnings,” Wenig said.

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