The coronavirus pandemic has had terrible effects on several businesses and industries. However, e-commerce is one space that has seen a massive boost.
Thanks to the numerous stay-at-home orders, many households have had to rely on e-commerce firms for pretty much everything. These companies themselves are coasting into impressive profits.
Companies Switch Online As Physical Stores Remain Closed
eBay, one of the largest and most popular e-commerce firms, has seen significant gains in this period, enjoying what is now growing to become an industry-wide boom. The Guardian reported last week that the Silicon Valley firm had recorded a significant increase in the number of new signups in April, as more businesses make the switch to the online space.
Unlike several other e-commerce sites, eBay facilitates consumer-to-consumer product sales. So, it is possible for companies that make sales as part of their business model to sign up on the platform and reach new clients.
As The Guardian reported, eBay recorded up to 50,000 new signups in April. The news source explained that the e-commerce firm had witnessed a particular upsurge in subscriptions from smaller businesses, with firms ranging from hardware stores to fashion brands pitching their tent with the platform as a means of staying operational amid the lockdown.
Rob Hattrell, the head of eBay’s UK division, explained that retailers are looking for means to stay functional at this time. Since the government has restricted them from opening their doors, they have had to think out of the box and make drastic changes. He added that the firm expects new signups to surge in the next few weeks as well.
The company’s good fortunes have also spilled over to its stock price. At the end of April, eBay reported its financials for the first quarter of the year, with several results showing an encouraging trend.
As the earnings call showed, eBay reported earnings per share of $0.77, as opposed to the $0.74 that analysts estimated. The company reported revenues of $2.4 billion, while active buyers grew by 2 percent to 174 million. The firm’s non-GAAP net income from continuing operations was $586 million.
All of these brought the firm’s stock price to $42.44 on Monday – a 52-week high.
E-commerce continues to Win
Of course, eBay’s results have been indicative of a broader market trend. The e-commerce space has gotten the most significant boost from the coronavirus pandemic, and several top industry players have reported favorable results in the first quarter.
Amazon, one of the largest e-commerce firms in the world and the American leader, reported its financial results for the quarter last year as well. As the results showed, the company’s earnings per share were pegged at $5.01, while revenues were $75.45 billion.
While the firm did miss out on analysts’ $6.25 earnings per share expectations, the company’s revenues outpaced expectations by $1.84 billion. Amazon also increased its expenses for the quarter, as it hired up to 175,000 new employees as a result of the pandemic, while also setting up testing centers for its factory employees.a
The Seattle-based retail giant has also committed a significant portion of its revenues in the second quarter to help fight the virus’ spread.
