What's Happening?
Etsy has announced the sale of its secondhand clothing marketplace, Depop, to eBay for $1.2 billion in cash. This decision comes nearly five years after Etsy acquired Depop for $1.62 billion. Depop, founded in 2011, has become a popular platform among Gen Z and millennials, generating approximately $1 billion in gross merchandise sales in 2025. The platform boasts seven million active buyers, with nearly 90% under the age of 34, and over three million active sellers. Etsy's CEO, Kruti Patel Goyal, expressed confidence in Depop's future growth under eBay, citing the latter's scale and operational capabilities. The sale is part of Etsy's strategy to concentrate on its primary marketplace amid challenges in maintaining growth post-pandemic.
Why It's Important?
The
sale of Depop marks a significant shift in Etsy's business strategy, allowing the company to refocus on its core marketplace. This move is crucial as Etsy faces stiff competition from other e-commerce platforms like Amazon, Temu, and Shein. By divesting from Depop, Etsy aims to streamline its operations and enhance its offerings to better serve its buyers and sellers. For eBay, acquiring Depop strengthens its position in the growing secondhand fashion market, appealing to younger consumers who prioritize sustainability and unique fashion finds. This acquisition could potentially boost eBay's market share and revenue in the fashion resale sector.
What's Next?
The transaction is expected to close in the second quarter of the year. As Etsy redirects its focus, it will likely invest in enhancing its platform to attract more buyers and sellers. Meanwhile, eBay will integrate Depop into its operations, leveraging its resources to expand Depop's reach and capabilities. The success of this acquisition will depend on eBay's ability to maintain Depop's brand identity while scaling its operations. Both companies will need to navigate the competitive landscape of e-commerce, where consumer preferences and technological advancements continue to evolve rapidly.
