EBay 2015 Sales Forecast Tops Estimates Amid Mobile Expansion

Posted: March 29, 2013 by Rizwan Riyad in News, U.S, world
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EBay Inc. forecast 2015 sales that topped analysts’ estimates and said it expects the total volume of merchandise sold in its marketplace to reach $110 billion by that year as the online retailer adds users and mobile tools.

Revenue in 2015 will be $21.5 billion to $23.5 billion, the company said today at a meeting with analysts in San Jose, California. Analysts on average had estimated 2015 sales of $21.4 billion, according to data compiled by Bloomberg.

Chief Executive Officer John Donahoe is adding features — including a local-shopping tool unveiled today — to bolster a turnaround effort that has helped boost shares 75 percent since he took the helm from Meg Whitman in 2008. Under Donahoe, EBay has pushed beyond its auction roots to expand with businesses such as instant sales and mobile payments.

“Investors want to know that there is a roadmap for strong growth, and management is delivering that message,” said Colin Sebastian, an analyst at Robert W. Baird & Co. “They are laying out multiple incremental growth opportunities, including local commerce, global expansion, and of course mobile.”

The shares rose 4.1 percent to $54.22 at the close in New York. The stock has advanced 6.3 percent this year, compared with a 10 percent gain for the Standard & Poor’s 500 Index.

By the end of 2015, 25 percent of users will be in developing regions, EBay said. As part of a push into new markets, EBay said it debuted a Russian language site two weeks ago. The country posted a 75 percent surge in EBay users last year, the company said.

Social Features

As it seeks new ways to lure members and merchants, EBay said that it’s building social features to help users find items for sale in a local neighborhood, part of an effort to fend off competition from Facebook Inc. as the social network expands in retail.

“Online commerce will not devour offline retail, but it will transform how we shop,” Donahoe said at the meeting. “Smart retailers are innovating. They’re reinventing and reimagining the store and what it means to shop.”

EBay’s local retail tracker comes as stores are increasingly turning to social-networking services like Facebook and Pinterest Inc. to promote brands and sell merchandise. Last year, EBay redesigned its homepage, adding a feature to show users products based on their personal information and purchasing history.

Mobile Devices

More of those purchases are happening on mobile devices, EBay said. About 25 percent of users on EBay’s PayPal service are accessing the product via mobile devices. Payment volume for PayPal can double over the next three years, EBay said.

EBay expects to enable $300 billion in commerce volume by 2015, up from more than $175 billion last year.

“We’re moving from a business that’s dominated by a desktop-based act to a truly ubiquitous presence — anytime, anywhere, any device,” Devin Wenig, president of EBay Marketplaces, said at the meeting.

With users accustomed to commenting on pictures, Facebook and Pinterest have given companies ways to garner instant feedback for specific items. That allows them to forecast production and design based on users’ requests — something that hasn’t typically occured on EBay.


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