For lovers of old timey or quirky aesthetics, Etsy turned the internet into an open craft fair of vintage and handmade goods. It’s where you go to dress like a hipster Sherlock Holmes, buy a wedding ring nest made out of moss, or decorate your interiors like a Tim Burton film. It’s also a $20 billion tech giant.
Now, it’s staking a claim in the growing world of clothing resales. On Wednesday, Etsy announced plans to buy Depop—an online marketplace for used clothes that’s wildly popular with Gen Z consumers—for $1.62 billion in mostly cash deal.
Second Hand Success
Depop didn’t reinvent the wheel: you could buy and sell used clothes online long before it was founded in 2011. But the company’s marketing, which is social media savvy and ethically and environmentally conscious, hit a home run with younger audiences. Some users, hawking coveted streetwear or trending looks, have even turned into famous fashion influencers. With a brand solidified and youth on its side, trends are in its favour:
- Ninety percent of Depop’s 30 million users, spread across 150 countries, are under 26. And while young shoppers are particularly active, more and more consumers are expected to turn to cheaper and greener used alternatives.
- The global market for pre-owned apparel is worth about $40 billion annually, or 2 percent of the total apparel market. But it’s expected to grow 15 to 20 percent annually for the next five years.
“What happens is they start selling clothes from their wardrobes,” Maria Raga, CEO of Depop, said of the company’s Gen Z users. “They’re pretty much mobile natives, so they know how to get the ball rolling.”
Suits Come Calling: The second hand market is all the rage with well heeled investors in their nice, new suits, too. Last month, Lithuania-based Vinted, the second largest secondhand fashion marketplace in Europe, raised €250 million at a €3.5 billion valuation. Two Depop rivals, ThredUp and Poshmark, have gone public in the U.S. this year.