The news comes as Ebay this week reported that Q2 revenue rose 9% (6% currency neutral) to $2.6 billion, primarily driven by a 10% (7% currency neutral) rise in gross merchandise volume to $23.6 billion.
But that was offset by rising operating expenses. GAAP operating margin in the quarter fell to 15.4%, compared to 19.8% for the same period last year, and non-GAAP operating margin fell to 25.2%, compared to 26.4% for the year-ago period, according to a company press release.
Ebay has been moving assertively to defend its global position as a marketplace, but Amazon, whose own marketplace continues to provide more of its sales, isn't making that easy.
Ebay's moves have included revamping its website to invigorate discovery, adding free and speedier delivery, pushing its sellers to offer fewer auction-based sales and offering more promotions. It's working somewhat, but it's expensive. In the second quarter, eBay grew active buyers by 4% across its platforms, for a total of 175 million globally, the company said. Its marketplace platforms delivered $2.1 billion of revenue and $22.6 billion of GMV.
"[W]e spent more and I think the additional sales and marketing as a percentage of revenue highlighted that," CFO Scott Schenkel told analysts on Wednesday, according to a transcript from Seeking Alpha. "Look, we are in a very competitive market and in e-commerce landscape that’s ... really competitive."
Without providing many specifics, executives talked about various attempts to stoke growth that met with mixed results. Poorly performing initiatives have been cut, which CEO Devin Wenig said speaks to the company's adaptability. And, as he has before, he once again suggested that patience pays.
"[W]hat I am holding our brand spend accountable for is moving aided consideration and we are beginning to see aided consideration move. It hasn’t yet translated to our buyer growth number — I believe it will," he said. "[W]e have got to be persistent and run the company for the long-term and not shut it off because it didn’t make an impact this quarter."
Ebay also said it intends to sell its holdings in Flipkart and end its strategic relationship with the company. The company said the sale will represent gross proceeds of an estimated $1.1 billion.