Etsy Has Decided To Leverage The Power Of Gen Z By Acquiring Depop.
The second-hand market is booming like never before because of the ongoing global pandemic. Unemployment, shrinking pockets, and an unstable economy has forced people to change their buying patterns and turn towards second-hand products. Additionally, the alarming rise in global warming and pollution have made the buyers re-tailor their shopping beliefs, and have pushed them towards more sustainable and humane fashion, craft, and home decor options.
On the heated ground of the incessant expansion of the second-hand market, the top two-sided shopping brand of the US – Etsy has bought the vibrant British shopping app, Depop, which is most preferred by Gen Z for secondhand sales and purchases. The deal was closed at $1.6 billion paid mostly in cash.
Etsy’s Decision To Claim Top-Spot On Second-hand Market
Etsy, popularly known as the “house of brands”, started in 2005 and went public in 2015. It operates two-sided online marketplaces which connect millions of passionate and creative buyers who deal in craft, home decor, vintage furniture, collectibles, art, handmade toys, jewelry, clothes, etc. The customer demographic of Etsy states that the age of its average consumer is 39 years, and therefore, it falls into more serious shopping choices.
Depop, on the other hand, was founded in 2011. It provides a social environment to its customers by allowing them to create their personal accounts for the purpose of launching, marketing, buying, and selling products. It caught up with the market’s pace quickly, creating its very own clan of consumers who on average fall under the age of 26 years. One can find them hanging more on newer social media platforms like Instagram, Tik-tok, and Snapchat.
Generation Z – The Driving Force Behind The Growing Second Hand Market
Gen Z – or the consumers below the age of 24 have immense passion in second-hand shopping. This generation was found to be the driving force behind the sector’s growth, adopting second-hand fashion 2.5 times faster than any other age group. This approach has led to an increase in the second-hand market to $24 billion in 2020. The resale market which stands at $28 billion today is expected to grow to $64 billion in the upcoming 5 years.
Therefore, instead of creating a huge customer base in this demographic, Etsy decided to employ the ready-made customer base of Depop. In exchange, Depop will continue to and more efficiently use the resources of this industry.
Etsy Clarifying The Move
Josh Silverman in his statement said “Depop is a vibrant, two-sided marketplace with a passionate community, a highly-differentiated offering of unique items, and we believe in the significant potential to scale further. 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, e-commerce brands.”
He further added that, “We believe Depop to be the resale home for Gen Z consumers with a unique offering and highly-engaged user base. With the closing of this incredibly exciting transaction, Etsy’s ‘house of brands’ portfolio now includes four individually distinct and very special eCommerce brands – Etsy, Depop, Reverb, and Elo7 – with parallel growth strategies, all sharing similar missions, visions, and values. We are excited to welcome the entire Depop community into the Etsy family and look forward to applying Etsy’s value creation roadmap to help them further drive growth.”
Now, it will be quite interesting to see how the Depop customers react to the acquisition.
