Source: depop.com
In a seemingly unusual pairing, Etsy, the online crafts marketplace, last week reached an agreement to acquire Depop, a go-to fashion resale marketplace for Gen-Z, for $1.6 billion.
London-based Depop will significantly grow Etsy’s exposure to apparel, a billion dollar business already for Etsy, as well as extend its reach with younger consumers. About 90 percent of Depop's active users are younger than 26, and Depop is the 10th-most-visited shopping site among Gen-Z consumers in the U.S., according to Etsy, whose users tend to be older.
Known for its vintage clothes and streetwear, Depop resonates with younger generations due to its environmental and ethical shopping principles, reasonable pricing and an interface that feels like a social networking platform.
“Users can follow specific shops on their main feed, then interact with other users by commenting and liking their posts,” wrote Fast Company in a recent profile. “The direct connection between buyer and seller creates an instant feedback, which increases the speed of a transaction and also allows sellers to customize products for their buyers.”
Etsy foremost gains a strong foothold in the large and fast-growing second-hand market. Etsy, which is publicly-held, cited findings from ThredUP’s 2020 Resale report projecting growth at a 39 percent CAGR from 2019 to 2024 in the U.S. Investors are also strongly valuing the resale market with ThredUP and Poshmark able to go public this year.
Etsy entered the resale space with its July 2019 acquisition of Reverb, a site selling used musical gear, for $275 million. Younger consumers are adopting second-hand fashion faster than any other group.
Etsy cited synergies that support the acquisition, including the two operating two-sided online marketplaces connecting “passionate and creative buyers and sellers around the world.” It also plans to further scale the Depop platform, which is currently about a tenth the size of its own.
“We see significant opportunities for shared expertise and growth synergies across what will now be a tremendous 'house of brands' portfolio of individually distinct, and very special, ecommerce brands," Josh Silverman, Etsy’s CEO, said in a statement.
Depop will operate as a standalone marketplace run by its existing leadership team.
- Etsy to acquire global fashion resale marketplace Depop – Etsy
- Etsy to acquire depop Investor Presentation – Etsy
- Etsy is buying the fashion resale app Depop for $1.6 billion. – The New York Times
- Etsy is buying Gen Z-focused fashion resale app Depop for $1.62 billion – CNBC
- Etsy acquires resale apparel marketplace Depop – DigitalCommerce360
- The 10 most innovative retail companies of 2021 – Fast Company