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eBay Set to Enter Brazil

Zacks Equity Research

eBay Inc. (EBAY) is taking the first steps to launch its marketplace in Brazil by introducing a mobile app. The new eBay mobile application will sell fashion items to Brazilians.

The leading ecommerce website in the region is MercadoLibre (MELI), in which eBay has an 18% stake. The companies have operated as partners in Latin America.

eBay recently announced that it would strengthen its position in the BRIC countries of Brazil, Russia and China and this announcement appears to be in line with the expansion strategy.

Currently, eBay only operates Paypal payment services in Brazil. The new website will remain in English, although eBay will have a Portuguese version out within a year. It also intends to beef it up with other attractions depending on the way it is received.

With the launch of this new app and subsequently a marketplace platform, eBay hopes to march ahead of its major competitor Amazon (AMZN), which is yet to launch a full-fledged e-commerce website in Brazil. So far, Amazon has kept its operations in Brazil limited to an online bookstore.

eBay is one of the world's largest online marketplaces. Goods and services are sold on the platform by a large number of individuals and small businesses all over the world. Other than the U.S., it provides country-specific sites in the United Kingdom, Canada, Germany, Austria, France, Italy, Japan, Korea and Australia.

eBay reported second quarter revenues of $3.9 billion , up 14% from the year-ago quarter. Its non-GAAP earnings per share of 63 cents beat the Zacks Consensus Estimate of 54 cents per share.

Currently, eBay has a Zacks Rank #3 (Hold). Investors could instead consider Geeknet Inc (GKNT) with a Zacks Rank # 1 (Strong Buy).

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