E-commerce group Etsy said the acquisition would help it capture the second-hand clothing sector, which is expected to be worth $64billion in the US by 2024
E-commerce group Etsy has announced it has agreed to purchase Depop, a social shopping platform popular with young people, for over $1.6billion (£1.1billion).
Etsy said the acquisition would help it capture the ever-expanding second-hand clothing sector, which is expected to be worth $64billion in the United States by 2024, and increase its penetration among ‘Generation Z’ consumers.
It noted that Depop is the tenth most visited shopping website among people under 26 years old, who also comprise around 90 per cent of its active users and tend to be more environmentally conscious about their fashion choices.
From 2017 to 2020, the London-based firm grew at a compound yearly growth rate of nearly 80 per cent and achieved gross merchandise sales (GMS) of nearly $650million and revenue of $70million.
Likewise, Etsy has seen its sales surge in recent years as second-hand clothes become more popular among customers and the pandemic encouraged more of them to buy goods online.
In the first quarter of this year, the group, known for selling handmade gifts and craft supplies, saw its GMS and revenues more than double to $3.14bilion and $551million, respectively, while its net income jumped by more than 1,000 per cent to $143.8million.
Chief executive Josh Silverman told CNBC: We think Depop is the most exciting company in the most exciting sector in retail right now. Resale is growing like crazy.
Silverman said a further motivation for the deal was to take advantage of the rising share of workers belonging to Generation Z, colloquially known as Zoomers, who are set to increase to 1.3 billion by 2030 and already comprise a quarter of the global workforce.
He continued: Depop is the choice of Gen Z. Depop’s been growing like crazy; it grew over 100 per cent last year. And importantly, it’s growing with hardly any marketing spend. This really is an organic, authentic phenomenon.
Depop’s boss Maria Raga said: We’re on an incredible journey building Depop into a place where the next generation comes to explore unique fashion and be part of a community that’s changing the way we shop.
Raga said: Our community is made up of people who are creating a new fashion system by establishing new trends and making new from old. They come to Depop for the clothes, but stay for the culture.