- Jamie Iannone, eBay’s CEO, spoke with Insider about the next phase in the e-commerce giant’s evolution.
- It involves leaning heavily into new technology like artificial intelligence and live commerce.
- Iannone said eBay’s size would empower it against emerging competitors such as TikTok and Shein.
CEO Jamie Iannone is revealing the next step in eBay’s evolution.
Speaking after the e-commerce marketplace reported second-quarter earnings this week, Iannone told Insider that new technologies such as artificial intelligence would supercharge the company’s growth.
The company’s revenues grew 5% year over year to $2.5 billion, but gross merchandise value, or the total value of sales conducted on its site, fell 2% to $18.2 billion in the quarter.
Its new strategy includes building relevant experiences for shoppers and sellers, scaling tech solutions to be useful across eBay, and using new features such as AI and live commerce, or when sellers host a livestream where viewers can directly buy products.
When Iannone rejoined eBay as CEO in April 2020, he embarked on a strategy that included redoubling efforts on “focus categories” where eBay’s users most liked to shop: sneakers, handbags, watches, trading cards, and motor parts and accessories. He said those efforts had paid off.
The company has historically faced competition from large retailers such as Amazon and Walmart. Now a new crop of players is emerging, emphasizing low prices at a time when consumers are increasingly price-conscious. TikTok, for example, is launching a program to enable Chinese merchants to sell goods to US shoppers, Reuters reported. Shein and Temu have similarly made huge inroads in the US market.
“We think it’s the perfect time to evolve the strategy, when you look at the foundational work that we’ve done over the last couple of years, really setting us up, and then the new tools and technology and capabilities that are available now,” he said.
Building trust to keep ‘enthusiasts’ engaged
The company plans to cater to what it calls “enthusiast” shoppers, or buyers who make at least six purchases and spend an average of more than $3,000 on eBay annually, a group that represents about 70% of what’s sold on the site.
More than 90% of eBay’s roughly 16 million enthusiast shoppers buy products in focus categories.
That insight informs how eBay thinks about which areas it wants to scale. For example, it launched an authentication program that was initially geared toward sneakerheads, employing experts in a warehouse to verify that sneakers sold on eBay were legitimate. Once that program was up and running, the company extended it to other categories, such as watches and handbags, as well as to markets outside the US.
In some cases, eBay works directly with brands through a new program called Certified by Brand, which allows brands to certify that secondhand products sold on eBay are authentic.
It also completed its acquisition of the AI-powered apparel-authentication company Certilogo earlier this month.
Iannone said eBay’s authentication efforts brought a “game-changing level of trust to the platform.”
The hope is that trust will bring new buyers to eBay. The company’s active-buyer base continued to fall in the most recent quarter, reaching 131 million buyers, a 3% decrease year over year. But the number of new eBay buyers grew for the second straight quarter, Iannone said.
‘Doing all the hard work for the seller’
Iannone is enthusiastic about the potential AI holds. His company has already integrated Microsoft’s Azure cloud OpenAI technology to power what it calls “magical listings.” The tech creates product descriptions based on an item’s title, category, and other information input by the seller. The next version of that product is set to use image recognition, allowing eBay’s sellers to create a product listing based on a photo.
“This is us doing all the hard work for the seller,” Iannone said.
He added the hope was that generative AI would reduce barriers to sellers listing products.
The company also hopes to engage new buyers through live commerce, a popular method of shopping in China. Live commerce has yet to truly take off in the US, as other early adopters, such as Meta, have seen.
Still, Iannone said more than 100 sellers had tried eBay’s version and sold more than $1 million in goods in total.
“I think it’s earlier days in the US than in some of the Asian markets,” Iannone said. “But the early pilots we’ve seen have been really successful.”
When asked about new competitors such as TikTok, Shein, and Temu, Iannone said eBay was “focused on our strategy and how we win.”
Iannone said that 85% of eBay’s traffic was either free or organic, meaning shoppers usually visited the website by typing in ebay.com. Newer competitors, however, “spend a lot of money on paid marketing to acquire customers,” Iannone said.
“One of the things that’s really important when you think about other competitors is to really remember the scale of eBay,” he said.
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