On Wednesday, online marketplace Etsy announced its $ 1.625 billion acquisition of UK-based fashion reselling app Depop as the company seeks to expand its customer base among younger shoppers.
Depop is particularly popular with teens and young people in their twenties, who use the app to buy and sell clothes, following an online market model similar to Etsy’s, which is primarily used to sell made-to-order products. the hand. Young shoppers are driving the growth of the second-hand fashion market, which has helped make Depop the tenth most visited shopping site among Gen Z consumers in the United States.
About 90% of Depop’s active users are under 26, and Etsy hopes its acquisition of the company will help it capitalize on the purchasing power of this currently growing demographic. While Depop has been around for ten years, it experienced accelerated growth in 2020, with its gross merchandise sales and revenue both growing 100% year over year.
“We’re just excited to add Depop – what we think is the resale home for Gen Z consumers – to the Etsy family, ”said Josh Silverman, CEO of Etsy in a report. “Depop is a dynamic, two-sided marketplace with a passionate community, a highly differentiated offering of unique items, and we believe there is significant potential to grow further. “
Depop will continue to be based in London, where it is headquartered, and will operate as a stand-alone marketplace led by its existing management team.
“We are on an incredible journey to make Depop a place where the next generation comes to explore unique fashion and be part of a community that is changing the way we shop,” said Maria Raga, CEO of Depop. in a report. “Our community is made up of people who are creating a new fashion system by setting new trends and making new from old.”
Etsy has said it hopes to complete the sale in the third quarter of 2021, although the deal will first need to be reviewed by the UK regulator, the Competition Authority. followingLast September, the CMA stepped up its scrutiny of US takeovers of UK tech companies, so the acquisition will likely come under a fine-tooth comb before getting the green light.