Today, in a rare showing of intergenerational amity, the homemade-friendly e-commerce company Etsy announced it is acquiring resale platform Depop for $1.6 billion. The move seems designed for Etsy to broaden its customer base by pulling in a whole new generation of younger consumers.
Etsy, with its homespun flavor and emphasis on crafty goods, is unsurprisingly popular with an older demographic: the average user is 39, according to Business of Fashion. Depop, on the other hand, is like if an Urban Outfitters grew sentient and became hellbent on TikTok fame: the site is flush with vintage goods, old band tees, and stores maintained by influential shoppers. A large majority of the site’s customers are younger than 26. In 2019, the New York Times wrote about one 23-year-old Depop user, Bella McFadden, who would put outfits together for people based on, among other things, their astrological signs. This is the type of customer Etsy wants to court with its acquisition. The move “allows Etsy to deepen its penetration in Gen-Z, which is a really exciting and important demographic,” the platform’s CEO Josh Silverman said in a call with investors, according to BoF.
Etsy was primed to make an acquisition, as the pandemic has been a bonanza for resale platforms of all stripes. Over the course of 2020, as homebound shoppers began to reorganize and reconsider their wardrobes, Depop merchandise sales doubled. And the platform represents just one slice of an enormous pie. Depending on who you ask, the entire resale market is valued at anywhere from $24 to $40 billion a year. The various companies involved are acting accordingly to take advantage. In December, StockX raised $275 million, bringing its total value to $2.8 billion. Just last month, Vinted, a massive resale platform popular primarily in Europe, added 250 million euros in a new round of investments. Meanwhile, in the US, resale destinations like Poshmark, which offers more luxury fashion, and ThredUp, think a mall’s gently used section, have both gone public. None of this mentions the brand-specific efforts put together by places like Gucci, Patagonia, and Levi’s, who are attempting to cash in on the aftermarket value their clothing generates.
This new partnership marks Etsy’s attempt to plant a flag in its corner of the market—and to expand that market more generally. While at first glance, the two platforms don’t seem to have much in common, they are both destinations for a certain type of customer and seller. Together, the two might secure a near-monopoly on the quirky, weird, and custom-made. Many of the goods on both Depop and Etsy are homemade, whether from crafters or bedroom designers. A couple of years ago, a Depop customer’s tweet went viral after she posted an image of her recent purchase, a custom phone case pressed with flowers. The person who made it added goodies in her bag, like crystals supposed to bring “love, calm, and happiness,” they said in a hand-written note. The piece came from Depop—but it’s pure Etsy.