eBay (EBAY) to Wind Up GittiGidiyor Business Operations

eBay EBAY is set to close its Turkey-based online marketplace business GittiGidiyor, which it acquired in 2011.

EBAY announced that the marketplace platform will remain open for shopping until Jul 18 but new product listings have been restricted since Monday. Further, buyers and sellers will be able to access their My Account page until Sep 5.

eBay’s number of active buyers in GittiGidiyor business stood at 4 million at the end of first-quarter 2022.

The primary reason behind the latest move is the intensifying competitive scenario in Turkey that has been hurting the prospects of eBay, which has been struggling so far in 2022 due to the weakening momentum in online shopping.

Shares of eBay have been down 36.4% in the year-to-date period, lagging the Zacks Retail-Wholesale sector’s decline of 29.2%.

More Into the Move

EBAY expects a minimal material impact of the underlined divestiture on its current-quarter as well as full-year results.

eBay Inc. Price and Consensus

eBay Inc. price-consensus-chart | eBay Inc. Quote

Moreover, the inflow of resources from this divestiture is likely to help eBay strengthen its well-performing businesses and boost its prospects in the growing markets, thus aiding its business diversification strategies.

Further, the recent move will likely help EBAY deepen its focus on its business operations in other countries. Currently, eBay is active in 22 countries and 190 markets around the world.

However, we believe, the loss of a strong buyer base of GittiGidiyor business is expected to get reflected in the overall revenues of eBay wherein performance is hampered by a softness in transactional activities.

eBay generated net revenues of $2.48 billion, declining 6% from the year-ago quarter’s level.

Competitive Turkish E-commerce Market

eBay faces a huge competitive pressure from the e-commerce giant Amazon AMZN, which is consistently making strong efforts to expand its presence in the country. 

In March 2022, Amazon announced plans to open its first fulfilment center in Istanbul, Turkey, in the autumn of this year. AMZN is investing more than $100 million in the new site to cater to growing customer demand in Turkey.

Meta Platforms’ META social media platform Facebook runs Facebook Marketplace in the country.

META’s Facebook Marketplace allows users to buy and sell items within their local communities. Moreover, Facebook is opening store fronts within its app, making it easier for consumers to purchase directly within the app rather than through a separate shopping app. This enables Meta Platforms to expand its reach among customers.

Zacks Rank & Stock to Consider

Currently, eBay carries a Zacks Rank #5 (Strong Sell).

Investors interested in the retail-wholesale sector can consider Arcos Dorados ARCO carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Arcos Dorados has gained 20.1% in the year-to-date period. The long-term earnings growth rate for the ARCOstock is currently projected at 34.4%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.