eBay (EBAY) will liquidate business operations of GittiGidiyor

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

EBAY has announced that the marketplace platform will remain open for purchases until July 18, but new product listings have been restricted since Monday. Additionally, buyers and sellers will be able to access their My Account page until September 5.

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

The main reason for this latest move is the intensification of the competitive scenario in Turkey which has hurt the outlook for eBay, which has struggled so far in 2022 due to weakening online shopping momentum.

eBay shares are down 36.4% year-to-date, trailing the Zacks wholesale retail sector decline of 29.2%.

More in motion

EBAY expects minimal material impact from the highlighted divestiture on its results for the current quarter as well as for the full year.

eBay Inc. Pricing and Consensus

eBay Inc. Price Consensus Chart | eBay Inc Quote

Additionally, the influx of resources from this divestment is likely to help eBay strengthen its successful business and increase its prospects in growth markets, thereby contributing to its business diversification strategies.

Also, the recent decision will likely help EBAY to focus more 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 from GittiGidiyor’s business should be reflected in eBay’s overall revenue, whose performance is being hampered by weak transactional activity.

eBay generated net revenue of $2.48 billion, down 6% from the year-ago quarter level.

Competitive Turkish e-commerce market

eBay is facing huge competitive pressure from the e-commerce giant Amazon AMZN, which is constantly making great efforts to expand its presence in the country.

In March 2022, Amazon announced plans to open its first fulfillment center in Istanbul, Turkey in the fall of that year. AMZN is investing over $100 million in the new site to meet growing customer demand in Turkey.

MetaplatformsSocial media platform META Facebook operates Facebook Marketplace in the country.

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

Zacks Ranking and Stocks to Consider

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

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

Arcos Dorados has gained 20.1% since the start of the year. The long-term earnings growth rate for 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.

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