Is Ebay’s Short Renaissance Over? | EP 267 | The Hustle Daily Show Podcast

Key Takeaways

all right so back in the 90s when I was a kid I'd go on eBay all the time it was my first exposure to this Global Commerce system I would go on there every weekend buy baseball cards Mark I know you felt a similar way about eBay yeah I wouldn't log on and just see everything I could ever want and nothing that I could afford because I was 12. yeah well for us 90s kids that was the reality in recent times though eBay has done a little reconfiguring his business and today we're going to be talking about eBay's big comeback in e-commerce and also the hard times it's fallen on as of late I'm Zachary Crockett here with Mark dent and you are listening to the hustle Daily Show [Music] what's up everyone I'm Zachary Crockett here with Mark dent and you are listening to the hustle Daily Show today we're talking about eBay the website's been around for nearly 30 years it was the darling of the 1990s internet and in the past few years it's really made a push to be relevant again for a while that Renaissance was working but now the company has hit some choppy Waters Mark's going to fill us in on what's going on all right Mark we're talking eBay today eBay was my my favorite website when I was 12. I would go on there like every weekend to lust over baseball cards and I think it was my first exposure to a National Online Marketplace yeah this company was really the Pinnacle of the 90s internet boom right yeah it was my first online purchase as well I believe although CD now at roughly the same time might have actually been the first but yeah basketball card back in like the year 2000 for me and yeah it was like Amazon was selling books at the time CD now before Amazon bought it was selling CD and eBay had everything so they were in in some ways ahead of the curve and the interesting thing is that that was 20 plus years ago and eBay is hardly at the front of most people's minds and yet it's surprisingly powerful and vastly bigger than it was uh back in what many would consider it's Heyday yeah I mean you could still go on there today and it's really kind of a niche Paradise for collectors you can search for like a troll doll from the 1970s and you'll just find like thousands of dolls for sale in this very Niche category across many many different categories right and and as of a couple years ago this is a stat from 2020 there was one and a half billion listings on eBay wow and so when we think of like the the peak popularity if you will of eBay or at least when it was you know in the Zeitgeist more there was only 3.7 million listings so there are 300 x as many these days even though the company is you know not doing that great although for a while it seemed like it was having a little bit of a resurrection so you know let's go back back real quick to sort of the early pandemic pre-pandemic period as you said eBay wasn't quite its old self from the 90s it was kind of struggling a little bit it was facing some pressure from activist investors and it was thinking about selling off all their assets what happened in early 2020 that sort of led to the company turning around well they did sell off a lot of those assets including StubHub the ticket resale website they sold that for something like 4 billion and so that kind of made them more of a slimmed Down company to where they could focus and that is like something that Wall Street tends to love they love focus and what eBay did was they also hired a new CEO who was a former executive at Walmart which is obviously one of one of the biggest competitors of eBay so that kind of gave them somewhat of a new life but then they started making some fairly strategic moves that were kind of replicating what their upstart competitors like stockx and the real real which are niche resale websites have been doing stockx of course is a sort of a sneaker resale platform right yeah yeah they're sneakers the real real is kind of like luxury clothing named kind of Big Brand type of clothing and those websites authenticate everything so it's not perfect but when you were buying like a pair of Jordans you knew that they were going to be legit and eBay had always had problems with that going back to the 90s when Beanie Babies accounted for a huge portion of sales on eBay and a lot of times they weren't legit so eBay started to authenticate sneakers watches Handbags and trading cards which happen to have you know those blew up in popularity during the pandemic so you saw all these people who were online and eBay was now a little bit more trustworthy and these kind of Niche communities that you were talking about were all seen a Resurgence at the same time so it led to a lot more people using eBay the company saw its active buyers increase from around 174 million million in q1 2020 to 187 million a year later in 2021 its gross merchandise sales went from around 18 billion to 24 billion and that number basically encompasses everything that was for sale on the website and eBay makes its money largely by taking a cut of that so it was kind of a boom for eBay okay so the big question at the time was was this just a pandemic boom because a lot of companies saw a boost in profits a boost in sales during 2020 2021 so I think it was sort of a question on people's minds is this Just an Illusion what have we seen in more recent times as the pandemic is sort of fading back into the background of American discourse yeah well we've seen people you know log off essentially and that has been bad for numerous companies from Zoom to Netflix to Amazon uh the biggest competitor of eBay and so of course it's also been bad for eBay they've seen their user base face just shrink at a more rapid rate than it grew so like I was saying they had around 187 million active buyers in early 2021 well that number started to fall pretty much immediately in the second quarter of 2021 like when people started to get vaccines and and Venture back out into the world and now that number was down to 134 million yeah at the end of last year so that's that's quite the tumble uh it's stock rose up to around 81 in 2021 now that stock has fallen to 45. wow they had to lay off of 500 people recently it's just been really bad and and you know Amazon has had layoffs as well so I it's not unusual for a company in this space but I think that eBay is gonna it's suffering worse and has kind of predicted that things are going to be worse for them in large part just because they're not Amazon they're not Walmart or Target they're you know those companies are still at the front of people's mind and eBay just isn't for whatever reason even though they still do a lot of sales it's it's kind of weird yeah any hope here that there will be sort of are they banking on a new generation of consumers because obviously the 90s are back in fashion with Gen Z now yeah eBay sort of this 90s relic of tech and in a weird way it's sort of come back into the spotlight I I wonder if a part of eBay's new strategy here is to sort of go after this younger demographic I think that's part of it because they have been using you know influencers on Tick Tock you know like everybody does to try and communicate with a younger audience and I I think what at least the story that they're trying to show and you know they they just released these pretty negative results that we've been discussing just earlier this week but they've tried to kind of spin it by kind of highlighting that they're like we are going to be like the big company for sustainability and ESG and all those buzzwords which do appeal of course to a younger audience as well and and that's because eBay unlike Amazon unlike targets unlike Walmart the primary merchandise that they are selling is resale and it's something that is essentially a hand-me-down or or whatever it might be whether it's clothing whether it's a handbag Etc and so they're touting that as like being you know a little bit better for the environment and interesting things of that nature so they're trying to you know say that we are the number one player in the recommerce space interesting so that might appeal to this younger generation sort of the antidote to the fast fashion the sheens of the world that are rising up yeah right yeah instead of just the stuff that lasts for six months uh you're gonna buy someone somebody's already worn for six years and will hopefully last for another six years right that's an interesting play for sure the other interesting thing I found about this is just sort of how much they banked on this authentication model for their new business model it seems like almost an insurmountable challenge I mean you see the same thing with like fake reviews on the internet just sort of lending credibility and and authenticity to this vast digital space on the internet that seems impossible to reign in but I was digging into Sneaker culture a little bit this week and just saw a lot of sort of sneaker head people in the shoe Community complaining about eBay's authentication model and I guess there were these videos that had come out showing employees and the factories sort of validating some of this stuff and they they spend like literally like 20 seconds looking at the box or the shoe and making a decision if it's if it's legitimate or not and they sort of have to right because the sheer volume of stuff that's passing through their hands they can't put it under a magnifying glass each time and give it 30 minutes of examination on each item but I do wonder how how stringent those authentication processes are and what it's really doing to minimize fears about buying fake goods online yeah I mean I I feel like like you said it can just be this impossible task just because of you know as I said earlier there are one and a half billion listings or whatever on the web Titan and granted not all of those are authenticated because they're not expensive enough that they'd have to go through that process but you know some of those other uh like the real real and stockx I mean they have to do the same things and I I know customers have not always been happy there and so I almost feel like if one of them if eBay somehow becomes like really really good at authentication it would certainly give it this tremendous advantage that question is like how do you do that like it is just something that seems unscale I mean even stockx was sued by Nike because Nike went on the platform and found a bunch of inauthentic shoes being resold branded as original Nikes I'll say this the last thing I bought on eBay was a Calvin Klein windbreaker and that baby's authentic as far as I know all right duly noted well if Mark Denton can find an authentic Calvin Klein windbreaker there's got to be some more of them out there all right folks that's gonna do it for us today thanks for tuning in to the hustle Daily Show we're proud part of the HubSpot podcast Network our editor today is Robert Hartwig an executive producer is Darren Clark if you want to find more Tech and business coverage go check out our newsletter at thehustle.co email and we will catch you next week foreign