E-Commerce’s “Best Quarter in Two Years” Was Financed by Debt, Not New Customers

U.S. e-commerce grew 9.8% year over year in the first quarter of 2026, nearly double the rate posted in each of the prior four quarters and the strongest showing in over two years, according to Census Bureau data analyzed by Marketplace Pulse. It’s a genuinely strong headline. It’s also weaker than it sounds once three things get pulled apart: roughly half the acceleration was rising prices rather than rising volume, much of the real growth appears to have been financed by a one-third surge in buy-now-pay-later borrowing, and at the two major marketplaces that still disclose buyer counts, sales rose while the number of actual customers did not.

Half the “Growth” Was Just Higher Prices

The Census Bureau headline counts dollars, not items sold. Physical-goods prices, measured by the Federal Reserve’s preferred index, rose about 1.9% over the year — which puts real, volume-adjusted growth closer to 8%, still a genuine acceleration from the roughly 5% range that held through 2025, when flat prices kept dollar growth and unit growth nearly identical. But close to half of what made this quarter look exceptional was higher price tags, not more goods actually sold. Tariffs are the obvious suspect, though the Federal Reserve Bank of Minneapolis found that the categories with the steepest price increases were often not the ones facing the steepest tariffs — a reminder that the price story here is messier than “tariffs raised prices” alone explains.

The Customers Weren’t New — eBay and Etsy Show It Directly

The most revealing detail is who was actually doing the buying, and it’s only visible because two of the largest marketplaces still publish buyer counts alongside revenue:

Both platforms grew by selling more to the same customers, not by adding new ones. Amazon and Walmart, both larger than eBay and Etsy, don’t disclose buyer counts at all — Amazon reported paid units up 15% and Shopify reported currency-adjusted merchant sales up 30%, but neither says whether new or existing customers drove those numbers. That makes the acceleration genuinely hard to source at the platforms that matter most to most sellers.

The Clearest Sign of Real Growth Is Borrowed Money

The strongest evidence of actual customer growth, rather than existing customers spending more, sits with the companies that lend shoppers the money to do it. Affirm and Klarna, the two largest installment-payment providers, both posted user growth in the roughly 20–22% range for the period, with purchase volume growing faster still — Klarna’s gross merchandise volume rose 33% year over year. Affirm’s average purchase size fell over the same stretch, a sign shoppers are increasingly financing everyday, lower-ticket purchases rather than saving BNPL for occasional big-ticket items. Much of this quarter’s real, volume-driven growth appears to have been bought on credit rather than won through new customer acquisition in the ordinary sense.

One-Off Factors Flattered the Numbers Further

Even the eBay figure carries caveats beyond currency swings: the quarter benefited from record collectible-card sales, including a single card that sold for $16.5 million. How much of eBay and Etsy’s dollar growth reflects higher prices versus more goods sold is impossible to determine from the outside, since neither company discloses unit volumes — but between currency effects, one-off collectible sales, and a rising price environment, several distinct factors were all pushing the reported numbers upward at once, on top of whatever underlying demand actually existed.

What Happened Next Matters Here

This was Q1 data, published in May. By the time Q2 numbers came in, growth had accelerated further, to 12.2% — an even faster pace than this already-unusual quarter. That raises the open question this report couldn’t yet answer: whether the credit-financed pattern visible in Q1 deepened through Q2, or whether the acceleration broadened into genuine new demand. Either read is consistent with the data available at the time this report was published, which is itself the point — a single quarter of GMV growth, without buyer-count data from the platforms that matter most, is not enough information to tell the difference between a healthier market and a more leveraged one.

What Sellers Should Actually Watch

Revenue growth at the platform level says less than it used to about whether a market is healthy, which shifts what’s worth tracking at the seller level too:

• Track repeat-purchase rate and new-to-brand customer share directly in your own Amazon Brand Analytics data, rather than inferring customer growth from revenue growth — the platform-level data shows exactly why that inference can mislead.
• If BNPL options are relevant to your price point, consider what enabling one at checkout does to conversion versus average order value — the data suggests a meaningful and growing share of purchases in this range are happening specifically because financing is available.
• Treat a quarter of strong revenue growth with some skepticism about margin health, since price increases inflate the top line without necessarily improving unit economics.

This is also a case for why retention economics matter more than acquisition numbers alone this year: a market where existing customers are financing more of their spending, rather than a market adding new buyers, rewards a seller’s ability to keep and grow existing customers more than one built purely around new customer acquisition. And separating protecting real margin from top-line revenue growth is exactly the discipline this quarter’s data argues for — a sales chart that’s climbing partly on price and partly on financed purchases isn’t automatically a healthier business underneath it.

The Bottom Line

This wasn’t a bad quarter for the platforms and sellers who benefited from it — more dollars from existing customers are still more dollars, and eBay and Etsy are more profitable for it. But as a gauge of e-commerce’s underlying health, gross merchandise volume has become an unreliable single number: inflated by price, and increasingly a measure of how much more existing customers spend rather than how many new ones a marketplace has won. The demand that did grow this quarter was real, but a meaningful share of it grew on borrowed money — and a boom financed by consumer credit is still a boom, until the repayments come due.