E-Commerce Battle: Amazon and eBay on Deck

Wednesday, 4/22, at 5pm, eBay (EBAY) announces their Q1 results. Wednesday, 4/23, Amazon (AMZN) reports their Q1 results.

Although at analyst day, eBay's John Donahoe took great pains to explain why the companies don't compete, nobody (merchants or Wall St.) buys that argument. It's clear at every level that Amazon is taking huge share from eBay while eBay deals with their ongoing 'core marketplace' issues.

In fact if you look at the Q4 results:

• Amazon grew at 18% (that's the entire business - I'm sure the seller business was much higher)
• eBay's GMV grew at -12%
• eCommerce grew at -3% (comscore)

Thus in Q4, Amazon grew a whopping 21% faster than e-commerce and a stunning 30% faster than eBay.

It's going to be interesting to see if eBay can do better than the - 12% - there are arguments on either side of that bet. Also, can Amazon continue it's 20%+ > ecommerce growth AND it's > 30% growth over eBay.

As eBay is shedding some distractions like StumbleUpon and Skype, the focus on the core marketplace will get more intense than it is today and all eyes this afternoon will be on any signs of improvement or worsening in that busines.

ChannelAdvisor's Q1 data

At ChannelAdvisor we track same-store-sales closely and here's what we saw in Q1. While we are a small % of eBay+Amazon's GMV, historically our data tracks pretty closely to what is going on at the larger companies. Same store sales takes out any data skewing from customer adds which are pretty significant.

We look at our data on a monthly basis and in Q1 each month is roughly 33% of the Q so you can average to get a feel for the Q.

• Ecommerce:
  
  • Jan - 3% y/y growth
  • Feb - 4% y/y growth
  • March - 9% y/y growth
• eBay:
  • Jan - -12% y/y growth
  • Feb - -10% y/y growth
  • March - -5% y/y growth
• Amazon:
  • Jan - 40% y/y growth
  • Feb - 47% y/y growth
  • March - 55% y/y growth

So looking at our data, it looks like e-commerce in general started to rebound in March with eBay and Amazon both benefiting from that lift about the same.

Again there are lots of caveats to this data -for example, we don't see any media GMV for Amazon, it's all what is called EGM - Electronics and General Merchandise. So it's very possible that Amazon could have had a terrible or great Q on that business and we wouldn't see that. So think of these as directional datapoints that have to be put into context. Also we are annualizing our significant release of our Amazon UK product so that is causing some unusually large growth in that geography that is ChannelAdvisor customer specific most likely.

Wall Streets Expectations for eBay and Amazon

eBay concensus estimates:

• Q1 Revenue - $1.94b-1.98b
• Q1 EPS - $.33-$.35
• Q1 US GMV Growth - -15% to -10%
• Q1 Intl GMV Growth - -2 to 2%
• Q2 Rev guidance - $1.98b-$2b
• Q2 EPS guidance - $.35-$.37

Amazon concesus estimates:

• • Q1 Revenue - $4.7b - $4.9b
  • Q1 EPS - $.31
  • Q1 Op Income - $260-$285
  • Q1 US Rev growth - 13%-16%
  • Q1 Intl Rev growth - 13%-16%
  • Q1 Third-Party Mix - 30%-33%
  • Q2 Rev guidance - $4.5b - $4.65b
  • Q2 Op Income guidance - $240-$26
    
    

We'll have a wrap-up here on Friday so we can compare how the two companies did.

Disclosure: Author is long Amazon and Google

Comments

[Yankee Trader:]

eBay will continue going downhill as long as they treat the small sellers like cannon fodder. Those like us who are tired of the inane rules and price increases have left or are working on leaving. Now eBay's new changes just announced do nothing to improve the situation and may in fact hurt it if the feedback change that is rumored comes true - no feedback rating for diamond powersellers. They want to hide the horrid feedback that the large sellers have so more people will buy from them.

Oh well eBay's loss is Bonanzles gain! Bonanzle.com should breat 50,000 users within a day or 2 and within a week or 2 it will be the 3rd largest auction site surpassing ecrater. And it is all due to folks that eBay has driven away. These are the folks like us that were there on eBay back in the 90's when they couldn't keep the site up because of the rapid growth such as Bonanzle is enjoying now. eCommerce is fun, affordable and profitable again on Bonanzle!

Apr 22 03:34 PM

[NYM Arts:]

Cetin Hakimoglu is WAY Out to Lunch.
Dude ...Get a Clue....
Ebay and Amazon are TWO COMPLETELY Different Gigs.
You Obviously talk other peoples talk. You do not speak from EXPERIENCE. Hence your Comment is MOOT (Meaningless).

Apr 22 04:55 PM

[Bob C:]

@Cetin Hakimoglu
"You can't pass off anecdotal evidence as fact. Most large businesses don't cater to the little guy. They have much bigger fish to fry."

Guess what Cetin, it was the "little guy" that built eBay into an
e-commerce giant.
And since eBay has turned its back on the "little guy" it is failing, big time.
Go figure!!

Apr 22 04:55 PM

[NYM Arts:]

Listen Cetin (if I may) ,
You are not in touch with ANY FACTS.
You are full of sht.
Now, Go Away.

Apr 22 05:07 PM

[Bob C:]

@Cetin Hakimoglu
"Ebay is failing mainly because Google and Amazon are stealing marketshare."

Stealing!?!?
Please do some research.
eBay ran off thousands of sellers to Amazon, and other sites.

I pray that no one pays you for your opinion/advice.

Apr 22 05:12 PM

[NYM Arts:]

And Scot,
To us, Comparing Ebay to Amazon makes you look like a Stupid Fool.
Is that REALLY what you want ?

Apr 22 05:17 PM

[legaljunkie:]

All I know is amzn doesn't turn anything approaching 2 billion in net income. revenue is meaningless when your model still involves giving away lots of merchandise at a loss.

Apr 22 05:48 PM

[Leftfield:]

Ebay is dealing with it's "core marketplace issues" by pissing it away. It has always had horrible execution technically and one of it's false economies seems to be hiring low-grade technical help.

So, how can it compete with Amazon by trying to be more like them with a crappy, confusing site? But, they've done everything to drive away the small sellers that were their unique strength, calling them "noise." You don't get the blizzard of attic finds anymore that could raise cash for sellers and present bargains for sellers that could thrive in this down economy.

Ebay should be up more than anyone else in retail, period. They chose a remarkably stupid time to follow a remarkably arrogant and foolish CEO into decline.

Apr 22 06:39 PM

[Philip Cohen:]

"As eBay is shedding some distractions like StumbleUpon and Skype, the focus on the core marketplace will get more intense than it is today and all eyes this afternoon will be on any signs of improvement or worsening in that business."

Trouble is "the focus on the core marketplace" is totally out of focus: they clearly cannot see where they are going and undoubtedly a visit to the optometrist for some new spectacles is long overdue.

Apr 23 05:53 PM