Etsy Enters the Sustainable Fashion Industry by Acquiring Depop

Corporations acquire smaller related companies all the time. Sometimes it is advantageous to both companies, other times it causes both companies to regress. At times one company may benefit more than the other. As of last week, American e-commerce company Etsy has acquired London-based Depop, a fashion marketplace app.

Was it a smart move for Etsy to buy Depop?

Yes, Etsy made a smart choice buying Depop because they bought out their competitor and expanded their customer base.

Etsy.com describes itself as a “global marketplace for unique and creative goods” with a specific intention of building a community that connects buyers and sellers. The categories they sell under range from handmade, to craft supplies, and to vintage goods. Many items can fall under these categories such as home décor, art, toys, gifts, jewelry, and clothing. According to Depop.com, Depop is a London-based fashion marketplace app, “where the next generation come to discover unique items.” Depop’s main goal is to create a global community where buying, selling, and connecting allows fashion to be more diverse, less wasteful and more inclusive. Ultimately, both strive to bring their buyers and sellers together in a community environment and a positive experience.

With thrifting and shopping sustainably continuously on the rise, Etsy has eliminated a competitor from its market. Many consumers are looking for more ecofriendly ways of shopping and buying used clothing is a great and easy way to do so. Shopping used or vintage clothing means no new resources or energy is put into production for that item. The item already exists. Therefore, buying used is improving the sustainability of the clothing item. As a customer that has shopped on both platforms, both sell thrifted/used clothes. While Depop has a particular niche for trendy clothing amongst Gen-Z customers, Etsy’s customers are generally from older generations. According to TechPenny, the majority of Etsy’s customers are between 25-40 years old while 90% of Depop’s customers are under the age of 26. Etsy has opened its doors to expand its audience and make more money while taking a large competitor away from the secondhand clothing market.

It is often worth the risk associated with spending huge amounts of money because it has the potential to expand the company’s reach and improve their company over time. Etsy bought Depop for a cool $1.63 billion. Etsy has now stretched its corporate umbrella and increased the number of brand loyal consumers in the U.S., the U.K., and globally. This expands Etsy’s company by providing a wider age of audience, a more niche used-clothing market, and a wider global reach.

To be sure, some may argue that Etsy has made the wrong decision, and that it was not a smart move buying Depop. Purchasing the company was essentially placing an extremely large bet on the booming of second-hand goods, specifically clothing. While Etsy is trying to reach the next generation by purchasing Depop, will the trend of buying second-hand last long enough to be worthwhile? Gen-Z, the latest trendsetters, have trends that go in and out of season in the blink of an eye. Will Etsy and Depop be among those that come in hot but leave just as easily? If sustainable purchases through Depop and Etsy are more expensive, will fast-fashion still be a competitor?

However, it looks like the rise of sustainability isn’t going to fall anytime soon. Both Millennials and Gen-Z shoppers environmentally conscious purchases are only increasing demand. CNN has estimated that the resale market will continue to grow. In contrast, nearly half of fast-fashion retailers have seen a decrease in sales this year. According to Goodonyou.eco, the sustainable fashion industry is expected to triple in less than a decade. It is currently worth over $6.35 billion USD, predicted to grow to $9.81 billion in 2025 and $15.17 billion in 2030. Etsy made a $1.63 billion purchase into the market, owning an impressive amount of money within the sustainable fashion industry that will continue to grow at a substantial rate. This is due to the rising interest in sustainability, consumers desiring to be unique, and the rise of the community aspect. Consumers are now not just looking to buy; they want to trade and sell as well. 

Overall, Etsy made a very strategic and smart move by acquiring Depop. Etsy has increased their audience both in age range and location throughout the world. According to TechPenny, with a mean age of 25-40, they have now expanded to Depops 90% of users ages 26 and below. They have also reached more people globally, with over 26 million registered Depop users over 147 countries. Etsy now owns a large percentage of the fast-growing sustainable fashion industry that is only going to get bigger. They know that consumers are no longer looking for cheap, ill-made products. Buyers want products that are eco-conscious, long-lasting, and unique. Etsy and Depop take away the worries of not having products that are one of a kind. Since the clothes they offer are second-hand, this ensures customers that others are less likely to have the same thing. Etsy buying Depop has allowed Etsy to further their goals. Creating a global marketplace for unique and creative goods while building a community and personal experience.