Etsy Sells Second-Hand Fashion App Depop to eBay for $1.2bn
Etsy has announced the sale of Depop, the thriving second-hand clothing app beloved by Gen Z shoppers, to eBay for an impressive $1.2 billion (£890 million). This significant move comes just five years after Etsy acquired Depop for $1.6 billion.
eBay’s Strategy to Attract Younger Shoppers
The acquisition is part of eBay’s strategy to tap into the growing re-commerce market and attract a younger demographic. The rise in popularity of platforms that facilitate buying and selling pre-loved fashion is a reflection of younger consumers’ desire for sustainable, budget-friendly shopping alternatives.
Key details of the deal include:
– All-Cash Transaction: The sale is entirely cash-based and expected to close by mid-2023.
– Brand Retention: Depop will keep its name and branding post-acquisition, allowing it to maintain its unique identity.
– Boosting Used Clothes Sales: Depop’s integration into eBay aims to enhance sales in one of its fastest-growing categories, according to eBay’s CEO, Jamie Iannone.
Financial Insights and Market Dynamics
eBay’s announcement coincided with the release of its 2025 financial results, revealing a revenue increase to $11.1 billion, an 8% rise compared to the previous year. Following the news:
– Etsy’s Stock Surge: Etsy’s share price jumped by over 15% in after-hours trading.
– eBay’s Stock Increase: eBay’s stock also saw a rise, climbing nearly 6.5%.
Notably, nearly 90% of Depop’s seven million active buyers are under the age of 34, indicative of its strong appeal among younger shoppers. The platform boasts more than three million active sellers and has become one of the fastest-growing fashion resale marketplaces in the US, according to Kruti Patel Goyal, CEO of Etsy.
Etsy’s Shift in Focus
Etsy’s journey with Depop is part of a broader trend as the company reevaluates its acquisitions. Previously, Etsy had invested in several platforms to compete with e-commerce giants like Amazon. However, it has moved away from those strategies:
– Elo7 Sale: In 2023, Etsy sold Brazil’s version of its platform, Elo7, at a loss after acquiring it for $217 million two years earlier.
– Reverb Sale: Last year, Etsy announced plans to sell Reverb, a music equipment resale site bought in 2019, to refocus on its core business.
Conclusion
Etsy’s sale of Depop to eBay underscores the shifting dynamics of the retail landscape, particularly in the second-hand fashion sector. As consumers increasingly gravitate towards sustainable shopping solutions, this transaction positions eBay to better engage with the sought-after Gen Z demographic. With its unique model and dedicated user base, Depop is set for promising growth within eBay’s expansive reach.