The marketplace for handmade goods, Etsy has acquired the second-hand fashion app and platform Depop known for its traction with Generation Z in a deal expected to close in the third quarter of this year.
The trend for trading vintage or recycled clothing online, which Depop helped pioneer a decade ago, has now spawned several multi-billion-dollar ecommerce companies, as traditional fashion retailers grapple with growing consumer demand for more ethical and sustainable production practices. More than 90 per cent of Depop’s millions of active users are under 26, an age group known as “Generation Z”, giving Etsy access to a younger demographic than its main consumer base. Etsy users are typically millennials or older, with sellers’ median age around 39.
Etsy is typically used by “cottagecore aesthetic-chasers” if they are in the Gen Z group, but most of its sellers are aged 39 on average. It’s perfect for those looking for handmade, vintage, or arts-and-crafts goods, while Depop is the go-to app for Gen Z and millennials to buy and sell their second-hand clothing gems. With this in mind, Etsy bought Depop to try and tap into the Gen Z market, as the app is used by millions who are often 26 years old or under.
Speaking on the sale, Etsy chief executive Josh Silverman tells Financial Times, “The resale market, in general, is a massive market that we think is well-positioned for growth well into the future… We think Gen Z is the most exciting community within resale.” The acquisition is more than just a way to get into a market it once dominated, as Depop has also proved the profitability and popularity of its platform — revenue reached $70m USD last year, and there are many other platforms that have tried to replicate (and not pull it off as well) as Depop.
The sale also benefits both parties, as Depop wants to learn more about community safety while Etsy will understand how Depop has dominated social media and the app world. Maria Raga, Depop’s chief executive says, “Many of the challenges that we are going through as a business are things that Etsy has gone through before… Etsy has made massive improvements in terms of search and discovery, and this is something that we can definitely learn from.”