Etsy targets Gen Z customers with $1.6 billion Depop acquisition

E-commerce website Etsy, greatest recognized for promoting handmade and classic wares, is buying up a cooler, younger rival, UK-based secondhand procuring app Depop.

The $1.6 billion acquisition lets Etsy entry Depop’s younger and rising userbase. Etsy says greater than 90 % of Depop’s customers are underneath 26, which means they principally belong to Gen Z, whereas Etsy’s personal customers are firmly millennial, with a median age for sellers of round 39. Etsy claims that Depop is the tenth most visited procuring website for Gen Z client within the US.

“We are simply thrilled to be adding Depop — what we believe to be the resale home for Gen Z consumers — to the Etsy family,” Etsy chief government Josh Silverman stated in a press assertion. “Depop is a vibrant, two-sided marketplace with a passionate community, a highly-differentiated offering of unique items, and we believe significant potential to further scale.”

Depop, based in 2011, shares Etsy’s love of secondhand clothes. But whereas Etsy’s model leans extra in the direction of the classic and cosy, Depop’s is extra trendy. Depop’s revenues doubled final 12 months to $70 million, with most of this earnings derived from gross sales commissions.

While Etsy will get entry to Depop’s customers, Depop itself will have the ability to draw on Etsy’s expertise to scale internationally. “Many of the challenges that we are going through as a business are things that Etsy has gone through before,” Maria Raga, Depop’s chief government, told The Financial Times. “Etsy has made massive improvements in terms of search and discovery, and this is something that we can definitely learn from.”

The acquisition is the newest signal of exercise within the secondhand clothes market, although issues should not precisely steady. Depop rivals Poshmark and Thredup, for instance, have each seen market caps soar on profitable IPOs solely to fall once more when monetary earnings revealed widening losses amid sales growth. And Etsy itself has seen its shares drop from a pandemic high as world lockdowns start to raise and bodily retailers reopen. Grabbing Depop looks like a strategy to scale back that publicity and entry a mobile-first userbase.