eBay’s Latest Annual Report Shows Recovery Amid Challenges

eBay recently released its 2024 financial results. The numbers show that eBay is regaining its footing from the murky outlook of the previous years, when it was uncertain whether eBay could balance rising costs and declining revenues.

In 2024, eBay’s financial trend went back up. Observing it over a longer period of time shows that the temporary dip was not unusual in the scheme of greater things. But external pressures still loom.

Peaks and Valleys Were Usual in eBay’s Growth Path

Pandemic surges in almost all cases implied a decline in revenues in the year(s) following. The same is true for eBay, the eCommerce company with exploding net income in 2021, at the height of the Covid-19 pandemic.

A peak like the one depicted in 2021 shows that eBay had a particularly successful bottom line year with a net income of US$13.6 billion. In previous years, only the 2016 net income of US$7.3 billion stood out. At that time, eBay boasted a growing customer base with low operating costs, an advantage of its pure online C2C business, as it does not need to maintain inventory or logistics.

eBay was seen as an integral part of the eCommerce maturation in the early 2010s, so what happened that eBay now appears to be the struggling party in the market?

Recent Financial Performance Is Moderately Positive

eBay’s net income was -US$1.3 billion in 2022, meaning that costs outpaced revenues and led to a downturn. This was common for many online retailers at the time, as economic pressures and physical store reopenings took back some of the gains made in previous years.

At the same time, eBay rebounded quickly in 2023 and had higher costs but slightly higher revenues in 2024. In particular, marketing and advertising expenses were higher in 2024, one of the reasons for the lower net income.

But the Online Market Does Not Stand Still

What the financials do not spell out, however, is that the online market has brought forward some competitors that make eBay’s once novel approach more outdated. eBay was seen as an alternative to Amazon for users who want to spend less and/or make a buck of their own. Now, upstarts like Vinted are entering the scene. Other marketplaces like Temu, AliExpress and TikTok Shop offer lower prices, more products and consumer engagement than eBay.

This is the main reason why eBay's course is being watched with suspicion. eBay has relatively low costs, but other platforms are undercutting it and taking some of eBay's market share. The recent increase in eBay's marketing spending reflects its efforts to remain on top of consumer perception.