eBay Turns a Corner with Mobile Offerings

Analysts believe that mobile commerce will report rapid growth in the coming years and will account for 24% of the total e-commerce market by 2017. Although mobile commerce is dominated by travel, retail is also picking up. According to a Forrester Research, mobile retail will account for more than $25 billion in spending by 2017. Online retailers are already preparing to establish a stronger position within this segment.

eBay’s Financials
eBay’s (NASDAQ:EBAY) Q3 revenues grew 15% over the year to $3.4 billion, in line with the Street’s expectations. EPS of $0.55 was marginally ahead of the market’s targeted earnings of $0.54 per share.

Growth was driven by the PayPal segment. PayPal ended the quarter with more than 117 million users worldwide and saw revenues grow 23% over the year to $1.4 billion. During the last quarter, transaction volumes for PayPal grew 20% over the year.

Marketplace revenues are also picking up. For Q3, revenues transaction volumes grew 9% over the year to $18.3 billion. The number of active users for eBay’s merchandise offerings grew 10% to 108 million. This was the fastest growth reported by the segment since 2007.

For the current quarter, eBay expects revenues of $3.85 billion-$4 billion, with EPS of $0.66-$0.69. The company expects to end the year with revenues of $13.95 billion-$14.10 billion and EPS of $2.32-$2.35. The market was looking for the current quarter revenues of $3.95 billion with EPS of $0.68. For the year, the Street was aiming for revenues of $14.03 billion with EPS of $2.35.

Mobile Efforts Delivering Results
eBay’s mobile focus is finally starting to pay off and helping in its rebound. eBay has seen growth in adoption of mobile apps for both PayPal and the Marketplace segment. PayPal expects to complete $10 billion worth of transactions over mobile devices this year.

Within Marketplace, eBay added more than 800,000 new users who made purchases on eBay using their mobile apps. During the quarter, more than 100 million downloads for their mobile apps were registered. eBay claims that smartphones are being used to list more than 2 million items per week on their site.

eBay Expands Offline
eBay is also tying up with offline retailers to offer the retailer’s products through their website. During the last quarter, it added more than 20 retailers, with names such as Brooks Brothers added to their list. Consumers can now shop for Brooks Brothers’ products through the eBay site. In addition, eBay has also added 10 major U.S. retailers to offer PayPal point of sales systems in their stores. Consumers can purchase products at more than 7,000 store locations using their Paypal accounts from these stores.

Currently, the company is testing a new service, eBay Now, in San Francisco. The smartphone app lets consumers purchase products from retail stores such as Macy’s and Target for delivery on the same day. eBay is also expanding the delivery options so that consumers can choose when they want to receive the delivery from these stores.

The market has reacted positively to eBay’s bounce-back. The stock is trading at $49.51 with a market capitalization of $63.25 billion. It touched a 52-week high of $50.94 last week.