Etsy, the Brooklyn-based online global marketplace for makers, made the headlines recently when it announced it was buying Depop, the second-hand fashion resale app which is immensely popular with Gen Z. Here, Creative Entrepreneurs founder, Carolyn Dailey, shares her thoughts on this major deal:
I remember when Etsy started, back in 2005, as a humble e-commerce platform for creative entrepreneurs to showcase and sell their handmade goods and vintage items.
The company has exploded onto the online stage since, now with 1,400 employees and at least 2.1 million sellers and 39.4 million buyers. Its resulting commercial muscle has put it in a position to pay £1.1bn to acquire Depop, the second-hand e-commerce darling which has a massive 30 million users of its own. Over 90% of these users are below the age of 26, putting them in the smartphone-addicted, highly sought-after Generation Z – the next age bracket down from millennials.
Known for its vintage clothes and streetwear, Depop resonates with younger generations given its environmental and ethical shopping principles, reasonable pricing and an interface that feels like a social networking platform.
The second-hand fashion market is seeing explosive growth, as the world becomes increasingly aware of the damage the traditional fashion industry does to the environment and the need to create sustainable business models. Josh Silverman, Etsy’s chief executive, said he expected the resale craze to only accelerate after the recovery from the pandemic, and that it would be led by Depop’s ‘passionate community’ of fashion-conscious young people.
I know first hand that the founders of Etsy rebuffed several substantial offers of investment over the years because they would have required Etsy to depart from its creative-first pure play. I believe this deal shows how putting creativity, meaning and connection first, helps to create highly successful commercial companies. And I don’t just mean Etsy and Depop. I’m thinking of all the individual creative entrepreneurs – the crafty creators on Etsy and Depop fashion sellers – who have contributed to these platforms and are becoming successful in their own right.
These small businesses are challenging the cliché associated with creative businesses – that they lead to ‘starving artists’. I think Simon Beckerman, the founder of Depop, might agree that creatives, with the right business guidance, have the potential to reach extreme heights. He made the Depop app ‘for fun’ in 2011, and is set to receive a windfall of approximately £45m as a result of the sale.
Etsy’s former CEO, Chad Dickerson, summed it up well in an interview he gave in August 2013 in which he emphasised the importance of human interaction and the meaning conveyed by creativity, describing Etsy as “a platform that provides meaning to people, and an opportunity to validate their art, their craft”.
After spending time with Etsy users, Dickerson said he discovered that “all commerce is about real human interaction” – that “at the end of every transaction, you get something real from a real person. There is an existential satisfaction to that.”
- The Guardian: Etsy buys second-hand clothing app Depop to tap into Gen Z.
- Business of Fashion: Etsy’s Depop Deal Is Only the Beginning for Resale Consolidation.
- TechCrunch: Etsy is acquiring UK-based social selling site Depop for $1.625B in a mostly cash deal.