How 30-year-old eBay is making a comeback thanks to AI

In early 2020, Jamie Iannone stepped into the role of eBay's chief executive amidst a tumultuous leadership transition. The company, once a titan of online retail, was struggling to maintain relevance and had just lost its status as the second largest e-commerce platform to Walmart. However, the onset of the Covid-19 pandemic provided an unexpected boost, and eBay is now looking to leverage this momentum through significant investments in artificial intelligence. Over the past year, eBay has rolled out five innovative AI features, including AI-driven shipping estimates and a shopping chatbot, alongside a partnership with OpenAI, the creators of ChatGPT. This strategic shift has garnered positive attention from investors, with eBay's stock soaring by 75% since 2020 and outperforming tech giants like Microsoft, Meta, and Amazon in the current year. Despite these gains, eBay faces the daunting challenge of reinventing itself in a competitive market filled with players like Amazon, Shein, Etsy, and Poshmark. While it remains a leading retail e-commerce site in the U.S., its market share has dwindled from over 7% in 2016 to under 3% today, according to data from Emarketer. The rise of AI tools across the industry adds to the urgency for eBay to innovate. Iannone believes eBay's extensive history offers a unique advantage in the AI landscape. With decades of product listings and customer interactions, eBay possesses a wealth of data to train AI models. Currently, the platform boasts 2.4 billion active listings and 134 million buyers. The pandemic also sparked a surge of new sellers, many of whom are eager to declutter their homes by selling unused items on eBay. To facilitate this, eBay has introduced the “magical listing” tool, which assists sellers by automatically generating product descriptions based on photos. Additionally, AI technology enhances the visual appeal of listings, transforming ordinary images into enticing presentations. Furthermore, eBay launched an AI assistant for sellers in the U.S. and U.K., capable of answering common buyer inquiries based on product details. Analyst Sky Canaves from Emarketer highlights a significant opportunity within the resale market, noting that the average American has between $3,000 and $4,000 worth of unused items that could be sold on eBay. By encouraging consumers to sell these items, eBay aims to boost its gross merchandise volume (GMV), which is a critical indicator of overall transaction value on the platform. Recently, eBay reported a year-on-year GMV growth of 10% in the latest quarter. The potential of AI in enhancing user experience is evident, with Barclays analysts noting that eBay's product investments are resonating with both buyers and sellers. In the September quarter, eBay's revenue grew by 9% year-on-year, reaching $2.8 billion, surpassing growth rates of both Walmart and Etsy and aligning closely with Amazon’s North America sales growth. While the initial contributions from AI investments are promising, much of the growth can be attributed to eBay's focus on popular categories such as car parts and sneakers. The platform has long been known for its ability to cater to enthusiasts who navigate its offerings with precision. To attract new users, Iannone is optimistic about the “eBay.ai” tool, which allows customers to describe their desired products using natural language, yielding tailored recommendations. This approach not only enhances the shopping experience but also sets eBay apart from larger retailers with its unique product mix. Although the AI shopping tool is currently limited to a select group of users, eBay is aware of the competitive landscape featuring offerings from Google and OpenAI, as well as emerging AI shopping startups. CEO Andy Jassy of Amazon has even projected that their shopping chatbot could generate an additional $10 billion in annual sales. As eBay navigates this AI-driven landscape, it remains committed to fostering human connections, as evidenced by its recent acquisition of Tise, a social marketplace for secondhand goods. Iannone emphasizes the importance of maintaining the personal touch that differentiates eBay: "We don’t want AI to overshadow the human connections that make shopping unique."