Etsy, an online marketplace has recently announced its intention to acquire UK-based fashion resale platform Depop, for $1.625 billion. This move is aimed at expanding its customer base to include Gen Z, who are the primary users of the Depop app, in order to buy and sell clothes. Depop’s two-sided online marketplace is similar to Etsy’s, which deals with the purchase and sale of handmade items.
Approximately 90% of the active users of Depop are below 26 years of age, which is the main driving force behind Etsy’s acquisition plan. Despite Depop’s 10-year presence in the industry, its growth accelerated considerably in 2020, with both gross merchandise sales as well as revenue increasing 100% Y-o-Y.
Younger, Gen Z shoppers are a major reason behind the burgeoning popularity of the secondhand fashion industry, which has in turn helped Depop reach the position of the 10th most-visited shopping platform among Gen Z customers in the United States.
According to Josh Silverman, CEO of Etsy, the company is excited at bringing Depop, which is hailed as the resale home for Gen Z customers, on board the Etsy family.
Depop will continue to be headquartered in London, and will function as a standalone marketplace, operated by the current leadership team.
CEO of Depop, Maria Raga also commented on the deal, stating that the company is on a strong journey to build Depop into a place that will allow younger generations to explore unique fashion trends, and become part of a community that is transforming the shopping experience. She added that the community is comprised of individuals that that developing a novel fashion system, by creating new trends as well as reinventing older ones.
Etsy is aiming for Q3 of 2021 to close the sale, However, prior to completion, the deal will be subjected to scrutiny from Competition Markets Authority, a UK regulator.
Source Credit: https://www.cnet.com/news/etsy-acquires-depop-for-1-6b-to-cash-in-on-gen-z-shopping-habits/