E-commerce sites have been beneficiaries of shelter-at-home policies, and on Wednesday eBay Inc. indicated its marketplace has been no exception. But growth was tempered by a downdraft in classified listings and a widening trend toward state Internet sales taxes, the company said.
Meanwhile, eBay’s venture into running payments for sellers on its platform is gaining momentum, top executives said, with the managed-payments program having reached $3 billion in volume for more than 32,000 sellers. Ebay is shifting sellers to its managed-payments platform after years of relying on PayPal Holdings Inc. to process payments for sellers.
“Managed payments continues to gain momentum,” Scott Schenkel, eBay’s interim chief executive, said during a call to discuss the company’s first-quarter results. Once eBay’s contract with PayPal expires later this year, “managed payments will become the only way to buy and sell on eBay,” Schenkel added. By 2021, the San Jose, Calif.-based company expects to have moved all sellers to the new platform, which is live in the United States and Germany now and relies on a payments gateway from Adyen N.V. The gateway funnels payments to a variety of processors, of which PayPal is one. Ebay said in February it plans to introduce the platform in the United Kingdom this summer, with Canada and Australia also on the docket.
“Key growth initiatives, including managed payments, are on track,” Andy Cring, interim chief financial officer, told stock analysts during Wednesday’s call. But stay-at-home orders nationwide in reaction to the Covid-19 pandemic have led to uneven effects for eBay. They helped drive volume for sellers on eBay’s marketplace, but the company said the crisis has also shut down business for auto dealers, depressing classified revenue.
All told, marketplace volume in the United States fell compared to a year ago, totaling $7.63 billion in the quarter, compared to $7.93 billion in the first quarter of 2019. Growth related to Covid-19 kicked in late in the quarter, Cring said, as the full effects of shelter-in-place policies began to be felt. “Consumer demand during shelter-in-place has surged,” added Schenkel.
Another variable for eBay is the steady imposition of state sales taxes on online business. Some 38 states have now adopted these taxes compared to just three a year ago, according to figures eBay presented. While marketplace volume fell 4% year-over-year, it posted a 2% growth rate before Internet sales taxes, the figures showed. But executives downplayed this impact in the context of the Covid-19 outbreak. “Internet sales taxes, relative to everything else going on, it’s a smaller issue,” Cring said.
All told first-quarter revenue came to $2.37 billion, down slightly from $2.41 billion in the first quarter last year. The earnings call presented an opportunity for eBay to introduce its new CEO, former Walmart executive Jamie Iannone, who took over Monday and spoke briefly before yielding to Schenkel and Cring. Earlier in his career, Iannone was a vice president at eBay and also worked for bookseller Barnes & Noble. Schenkel has filled in as CEO since the resignation of Devin Wenig in September.