Resale clothing marketplaces witnessed a surge in activity during the pandemic as people hawked goods online for money. Companies like Thredup — which followed rival Poshmark by going public — are part of a growing market for secondhand items, which is expected to more than double to $64 billion by 2024. To cash in on the trend, Etsy, an online shopping service known for handcrafted and boutique goods, is acquiring UK-based Depop for $1.63 billion in a mostly-cash transaction.
The resale app is arguably one of the most hyped in the sector, popular as it is with Gen-Z users with a love for vintage clothing, partly driven by an appreciation for sustainable fashion. Approximately 90 percent of Depop's users are under the age of 26 and it's the tenth-most visited site among Gen Z consumers in the US, according to its own data. Overall, it boasts more than 30 million users across roughly 150 countries.
In fact, Depop has become somewhat of an online sensation; a gateway into the latest fashion fads (sorry, trends) from trending streetwear to TikTok-endorsed clothing to the Y2K revival. For evidence, just check out its press coverage. Vogue Business wants to tell you How the Depop generation thinks and Dazed has asked If Depop is being gentrified? There's even an Instagram account that charts all the drama that occurs between buyers and sellers on the app. With success has come mainstream acceptance. Fashion brands like Benetton, jewellery maker Studs, Rodarte and Anna Sui have either opened shopfronts or launched collabs with Depop.
But, the publicity would mean little if the app didn't have the profits to back it up. Depop's merch sales and revenue reached $650 million and $70 million, respectively, in 2020 — both increasing over 100 percent over the previous year.
Etsy, meanwhile, is even bigger. The e-commerce site achieved record sales and revenue of $10.3 billion and $1.7 billion in 2020, respectively. Chasing expansion, it previously acquired music gear marketplace Reverb for $275 million in 2019. Etsy said today that it would use its resources to "scale" Depop beyond the "early innings of its growth." To preserve its identity, the company will remain headquartered in London and operate as a standalone marketplace run by its existing team.