eBay forecasts quarterly revenue below expectations on weak demand

E-COMMERCE firm eBay forecast first-quarter revenue below Wall Street estimates on Wednesday, signaling weak demand for products such as collector’s items and refurbished goods, sending its shares down 7 per cent in extended trading.

High interest rates and persistent inflation have hampered US consumer spending for two years, leading to sluggish demand for non-essential items such as collectibles and luxury accessories.

The e-commerce company has been pressurised by decreasing advertising revenue and faces intense competition from Amazon and China’s Alibaba Group, the B2B online marketplace.

The elimination of selling fees for consumer-to-consumer sellers for all items excluding cars sold domestically in the UK is also expected to pressure eBay’s take rate, which is how much money a business makes from a transaction.

The company expects revenue in the range of US$2.52 billion to US$2.56 billion for the first quarter, compared with analysts’ average estimate of US$2.59 billion according to data compiled by LSEG.

eBay expects gross merchandise volume, a key industry metric that denotes the total value of goods and services sold on the marketplace, between US$18.3 billion and US$18.6 billion for the quarter, below estimates of US$18.8 billion.

SEE ALSO

Even handicraft marketplace Etsy needs AI to compete, says CEO

Two Walmart heirs top US$100 billion wealth for the first time

Asean Intelligence

Get insights into businesses across South-east Asia

Get the free report

Revenue for the fourth quarter ended Dec 31 was US$2.58 billion, compared to analysts’ average estimate of US$2.57 billion according to data compiled by LSEG. REUTERS