As eBay Inc.'s CEO Devin Wenig steps down from the company, the California-based e-commerce giant must find a new chief executive who will bolster e-commerce sales and better distinguish the business among behemoths such as Amazon.com Inc. and smaller but fast-growing companies like Etsy Inc., analysts say.
EBay announced Sept. 25 that Wenig would step down after nearly a decade with the company, which has struggled to grow e-commerce sales and has fallen under intense scrutiny from activist investors pressuring the company to restructure and sell off businesses such as StubHub and eBay Classifieds.
Scott Schenkel, the company's senior vice president and chief financial officer, will be interim CEO until eBay names a replacement.
Wenig stated in a Sept. 25 tweet that he was not "on the same page" with the company's board.
"Whenever that happens, it's best for everyone to turn that page over. It has been an incredible privilege to lead one of the world's great businesses for the past 8 years," Wenig added.
eBay's Whitman campus in San Jose
Source: Steven Arnold via Wikimedia Commons
Wenig's departure comes as eBay's share of the U.S. e-commerce market has slid from 8.4% in 2016 to a projected 6.1% by the end of 2019, according to the latest data from eMarketer.
Meanwhile, Seattle-based online giant Amazon has seen its share of the U.S. e-commerce market increase from 32.2% as of 2016 to 37.7% by the end of the year. Walmart saw its share of the e-commerce market grow from 2.6% in 2016 to 4.7% by the end of 2019.
"It's sandwiched in the middle in terms of its value proposition," Andrew Lipsman, a principal analyst at eMarketer who covers retail and e-commerce, said in an interview. "If you're trying to be a huge marketplace, it's increasingly difficult to out-Amazon Amazon."
EBay said in a prepared statement that the company remains "the world's second-largest e-commerce retailer outside of China, second only to Amazon."
"The marketplace has never been as big as it is today — and we've been steadily growing our buyer base by 4% in recent quarters," a company spokesman said in an emailed statement.
What makes eBay different is its marketplace for collectibles and other treasure-hunt finds, but the company is also under pressure from companies like Etsy, which is now among the top 10 e-commerce companies, Lipsman said.
Facebook Marketplace is also gaining steam and causing competition for eBay, he added.
In a July 30 research note from Moody's, analysts said that competitive pressures could further diminish eBay's historically high profit margins due to rising advertising and marketing costs.
"We believe that eBay will face increasing competition from larger companies with significantly greater enterprise values such as Amazon, Alibaba Group Holding Ltd., Alphabet Inc.'s Google LLC unit, and traditional brick & mortar retailers such as Walmart who are increasingly blurring the lines between brick & mortar and e-commerce," the note said.
Tom Forte, a senior research analyst with D.A. Davidson who covers eBay, said in an interview that Wenig did an "amazing job" in the separation of the company from PayPal Holdings in 2015.
But Wenig "fell short" in coming up with a vision for the future of eBay, and that many of his initiatives, including ones that focused on machine learning, "never got eBay over the hump," he said.
Forte also noted that the initiatives activist investors pressured eBay to execute, including scaling back discretionary spending and selling off StubHub, were all "long overdue."
"I think Devin's departure might be a reflection of the activist investors, but I also see it as an inability to determine the next chapter of eBay," Forte said. "An argument can be made that he didn't act with enough of a sense of urgency."
Shares of eBay were down to $38.92 in after-hours trading.