(Reuters) – E-commerce firm eBay forecast first-quarter revenue below Wall Street estimates on Wednesday, signaling weak demand for products such as collector’s items and refurbished goods, sending its shares down 7% in extended trading.
High interest rates and persistent inflation have hampered U.S. consumer spending for two years, leading to sluggish demand for non-essential items such as collectibles and luxury accessories.
The e-commerce company has been pressurized by decreasing advertising revenue and faces intense competition from Amazon and China’s Alibaba Group, the B2B online marketplace.
The elimination of selling fees for consumer-to-consumer sellers for all items excluding cars sold domestically in the UK is also expected to pressure eBay’s take rate, which is how much money a business makes from a transaction.
The company expects revenue in the range of $2.52 billion to $2.56 billion for the first quarter, compared with analysts’ average estimate of $2.59 billion according to data compiled by LSEG.
EBay expects gross merchandise volume, a key industry metric that denotes the total value of goods and services sold on the marketplace, between $18.3 billion and $18.6 billion for the quarter, below estimates of $18.8 billion.
Revenue for the fourth quarter ended December 31 was $2.58 billion, compared to analysts’ average estimate of $2.57 billion according to data compiled by LSEG.
(Reporting by Juby Babu in Mexico City; Editing by Krishna Chandra Eluri)
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