'Changing Customer Demands' a Growing Risk, eBay Warns

SEC report cites difficulty in getting former customers to return

In case you missed it on Friday (okay, we did), in an annual filing with the Securities and Exchange Commision, eBay warned of slowing growth in its top three markets. In its coverage of the filing, Reuters noted that eBay said it predicts "difficulty getting former customers to return, adding to the normal challenge of attracting new users to its sites."

The story quotes the report in attributing these challenges to "changing customer demands."

"We face challenges in the U.S., U.K., and Germany, which are our three largest markets, as growth of listings, active users, and GMV on the eBay.com platform in those countries has slowed," the company said in the regulatory filing.

GMV is gross merchandise volume, the total value of goods and services sold on eBay sites, on which eBay takes a cut in the form of transaction fees.

Reuters:

-- The language of eBay's annual report underscores previous warnings the company has made about slowing growth. In January it reported solid fourth-quarter results but said it expected 2008 revenue to grow only 12 percent - well below the 18 percent that analysts, on average, had predicted at the time.

Jeffries & Co analyst Youssef Squali said the pessimistic language eBay uses to describe its business prospects reflect a growing awareness that eBay is no longer the only game in town for merchants. Rivals such as Amazon.com are enjoying surging growth in its merchant business as eBay slows.

EBay has also been suffering one of its periodic seller revolts in response to the recent round of price changes.

But Squali said the impact of the latest "sellers' strike" has yet to be reflected in any dramatic fall-off in auction listings. "The buyers don't go on strike," he said, but added: "Now sellers are looking for new options off of eBay." --

So, it would seem that the recent sellers' strike made an impact after all. Though the boycott didn't inspire eBay to alter the new fees and feedback changes that had (and still have) many sellers up in arms, it has, at the very least, left the company prediciting a little rain in its forecast.