6 Things You Need to Know About Etsy

Picture of Etsy’s website
 

By Tricia McKinnon

If you are looking for a piece of clothing that’s original something you are not going to see everyone walking down the street wearing then perhaps instead of shopping at Zara or Shein you should give Etsy a try. While at one time Etsy was more of a niche player, last year Etsy made $2.3 billion in revenue. It was also one of the fastest growing eCommerce sites in the United States last year. If you are curious about Etsy and its growth then take a look at these six facts about its eCommerce business.

1. Etsy has seen tremendous growth in the number of its active users which has increased from 46 million users in 2019 to 90 million in 2021. But only eight million of Etsy’s 90 million active customers make a purchase on the site at least four times a year. Etsy also has 100 million lapsed customers who have not made a purchase in the last 12 months.

2.  80% of Etsy’s customers and sellers are women and Etsy is trying to change this by attracting more men to its platform. Only 50% of male consumers have ever heard of Etsy and one of the ways it plans to increase awareness amongst this demographic is by placing ads during NFL games. “As we looked at our opportunities going forward, we realized we’ve never really tried to speak to men,” said Josh Silverman, Etsy’s CEO. “There’s tremendous amounts of merchandise on our platform that’s great for men. So we’re now starting to merchandise more directly to men. We’re starting to advertise in channels where men are a bigger part of the viewership.”

“We see its willingness to use TV advertising to improve its brand awareness as an effective means for it to increase the number of male shoppers on its platform,” said Tom Forte, analyst at D.A. Davidson. “Etsy’s efforts to attract male buyers reminds us of an earlier effort where it tried to get more consumers, in general, to buy from Etsy. It was trying to overcome consumers’ perception, in general, that the only thing sold on Etsy was hand-knitted sweaters for cats!”

3. Etsy is one of the beneficiaries of the pandemic with its face mask sales giving it more mainstream awareness. Etsy has sold more than 300 million face masks. Those sales brought new customers to the platform and now other categories like clothing are growing quickly on Etsy. “We see three potential catalysts for shares over the next 12-month period,” says Forte. “Stronger-than-expected operating results from: 1) improving the search and discovery platforms for enhanced customer experience, 2) the company’s efforts to improve mobile conversion, and 3) its local international efforts to increase sales between buyers and sellers in the same country.”

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4. Part of Etsy’s value is in the uniqueness of the products sold on its platform. “We aren’t trying to sell you the exact same commoditized product, just two cents cheaper or two minutes faster,” said Silverman.

5. There were 5.3 million sellers on Etsy in 2021 which is up from in 2.5 million in 2019. Etsy makes money by charging those sellers a listing fee and a 6.5% transaction fee.

6. With the resale market growing quickly Etsy bought British resale site Depop last year for $1.6 billion, its largest transaction ever. The transaction will also help Etsy to target a younger customer since Depop’s customer base is primarily Gen Z consumers while Etsy’s core customer is close to forty years of age. “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,” said Silverman. “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.”

Tricia McKinnonStrategy & Growth, eCommerceComment