Ebay has published disappointing first-quarter forecasts as the platform struggles to retain customers as the online ecommerce boom slows down.
The online marketplace platform watched its shares tumble by nearly 9% in extended trading.
Ecommerce platforms stocked up the coffers during the pandemic as online shopping boomed and shops closed, however the vaccine rollout has meant that ecommerce marketplaces are starting to see a decline in usage as consumers return to bricks-and-mortar retail.
Ebay rival Amazon, which saw huge growth during the pandemic has also forecasted disappointing first-quarter sales estimates.
Active users on Ebay have steadily declined over recent months and the company expects a further hit as it ramps up investments.
Users have declined 9% to 147 million in the quarter, Ebay said.
“The second quarter should mark the low point for margins during the year as we lap difficult comps and ramp up our pace of investment,” Ebay finance chief Stephen Priest said in a post-earnings conference call.
Shares fell to $50.28 in extended trading on Wednesday. They declined 18% so far this year, while the broader S&P Index dropped by 11%.
The company’s 2022 revenue and profit forecasts were also below expectations.
A large proportion of Ebay’s revenue comes from advertising on its platform which crossed $1 billion last year, the company announced.
Gross merchandise volume (GMV), however fell 10% to $20.7 billion.