Why PayPal is driving the mobile growth at eBay

Market Realist

Must-know: Why PayPal is driving eBay's mobile growth (Part 1 of 7)

eBay usage on mobile is increasing at a fast rate

eBay (EBAY) continues to make progress on four main competitive factors:

  • mobile
  • local
  • global
  • data

During the conference call to announce the second quarter of 2014 (or 2Q14) earnings, eBay’s management mentioned that the mobile gross merchandise volume (or GMV) grew by 68% to $12.3 billion in the last quarter compared to the corresponding quarter a year ago. This represents 20% of total GMV on eBay. It also mentioned that mobile attracted 6.6 million new buyers in the second quarter and that its app download count has hit 260 million. In fact, 59% of eBay’s buyers shop across multiple screens of smartphones, PCs, and tablets.

The mobile commerce market shows strong growth

Along with eBay, Amazon (AMZN) and Apple (AAPL) are some of the bigger players in the mobile commerce market. According to a report from eMarketer and as the chart above shows, the U.S. retail mobile commerce market will grow at a rate of 37%, from $42 billion in 2013 to $58 billion in 2014. The report also predicts that this market will grow to $133 billion by 2018, accounting for nearly 27% of retail e-commerce sales and 2.4% of total retail sales in the U.S.

Interestingly, the report also mentions that two-thirds of these mobile commerce transactions will come from tablets in 2014. These transactions will increase to 75% by 2018. Although Google (GOOGL) and Facebook (FB) are bigger players in the mobile advertising market, they’re also gradually trying to increase their presence in the mobile commerce market.

PayPal now driving mobile growth at eBay

eBay mentioned that the mobile GMV through PayPal has surpassed mobile GMV through eBay Marketplaces. The reason for the increase in mobile usage on PayPal is that people are buying goods and services through PayPal not only from eBay’s platform, but also from other shopping websites too. Plus, PayPal provides the convenience of one-click payments without entering credit card details, as users find it inconvenient to enter credit card details on the small screen of their mobile devices.

Continue to Part 2

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