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EBay adds 800,000 new mobile purchasers in Q3

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October 19, 2012

EBay continues to add mobile shoppers

EBay’s range of mobile applications continues to attract new users, with 800,000 consumers making a purchase from eBay via mobile for the first time during the third quarter.

The mobile momentum helped eBay deliver its fastest growth in active users since 2007, with the number up 10 percent overall. EBay reported that mobile adoption is driving acceleration in ecommerce growth rates, a trend the company expects to continue in the fourth quarter.

“[The 800,000 new mobile purchasers] would make eBay one of the leading mobile purchasing platforms and is a clear indication that if the mobile purchasing experience is simple and intuitive, consumers will embrace the service,” said Andrew Till, chief technology officer and head of smartphones and connected devices at Symphony Teleca, Palo Alto, CA.

“It is significant that PayPal Mobile is a key platform for eBay – PayPal has clearly created a strong brand for on-line purchases and thus is able to carry this over to their mobile services,” he said.

“This is similar to what we have seen happen with Apple –  consumer enter through the on-line services and then move to a higher level of purchasing from their mobile device.”

Streamlining PayPal
While the results were strong overall, the news was tempered by suggestions that PayPal may be headed for some staff reductions.

There have been rumors that new PayPal head David Marcus is looking to cut up to 400 jobs.

In the conference call with analysts, eBay executives referred to the efforts to streamline PayPal’s nine different product organizations and consolidate them into one global product organization but said the company has not yet determined what the impact of these moves will be.

The eBay Now app
Despite possible staff reductions at PayPal, the results were good and pointed to the growing role that mobile is playing for the eBay division.

PayPal is seeing strong growth from mobile and expects to do over $10 billion in mobile payments volume this year as more consumers use PayPal mobile to pay and more retailers offer this as a solution.

In the third quarter, PayPal increased its number of active registered accounts by 14 percent for a total of 117.4 million while revenue increased 23 percent. Additionally, PayPal’s net total payment volume grew 20 percent for a total of $35.2 billion.

Retailers are embracing PayPal mobile as consumers look for secure mobile payment methods and because it can drive incremental sales. A study commissioned by PayPal from July showed that 35 percent of all mobile sales completed with PayPal Mobile Express Checkout were incremental.

“Thirty-five percent incremental sales demonstrates the up sell potential that exists for companies that can effectively present their services on a mobile device and combine it with a simple – one click – transaction service,” Mr. Till said. “It also underlines the fact that consumers will use their mobile device to perform impulse or opportunity drive purchases if the service experience in simple and fast enough – given that bidding on eBay needs real time transaction support.

“In the bigger context, this shows that retailers wanting to maximize sales through mobile need to do 2 key things: Invest in a mobile  experience that exploits the full capabilities of the mobile platform/device and refresh on a regular basis as well as create a simplified transaction process and leverage account credentials form the desktop,” he said.

PayPal continues to expand its availability in other ways, including offering a cloud-based POS solution that is live wth ten major retailers, including Home Depot,  in more than 7,000 locations. PayPal expects to have 20 major retailers signed up for the POS solution by the end of the year.

PayPal is also now offering PayPal Here, which is available in five markets, and enables smaller retailers to use mobile devices to process credit and debit card transactions.

Sellers embrace mobile
Other highlights from the company’s third quarter results include that downloads of eBay’s suite of mobile apps have now surpassed 100 million globally while the number of items listed on eBay via mobile surpassed 100 million in the third quarter. Sellers are now listing almost 2 million items per week from their smartphones.

In September, eBay launched a new version of RedLaser offering local shopping, checkout and payment features. Best Buy is the first major retailer to adopt the solution for a geo-fenced in-store experiences providing shoppers customized content, local pricing and special discounts while they are in the store or outside.

In August, eBay launched eBay Now app as a pilot program in San Francisco, enabling local consumers to purchase products on their phones from local stores – including major retailers such as Target and Macy’s – and have their purchases delivered anywhere in the city usually in less than an hour.

EBay reported that revenue for the third quarter ended Sept. 30, 2012 increased 15 percent for a total of $3.4 billion. During the same period, the company’s net income totaled $597 million, or $0.45 per diluted share.

“EBay has been focused on mobile for many years and invested early in creating mobile solutions, hence the company has learned a lot about what consumers like and can respond to that,” Mr. Till said.”At the same time, eBay has developed significant insight into what does not work and the pitfalls to avoid, which is key.”

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York

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