Tamara Sender
Tamara Sender is a Senior Fashion Retail Analyst at Mintel. She researches and writes for Mintel's UK Fashion Reports.

Etsy, the American e-commerce marketplace, is to buy second-hand clothing app and platform Depop in a deal worth $1.6 billion, subject to regulatory approval in the US and UK.

The proposed deal is Etsy’s largest acquisition to date. Depop has been one of the COVID-19 pandemic’s few success stories, enjoying over 100% growth in both gross merchandise sales and revenues topping $650 million and $70 million respectively.

Source: Depop

Sustainability becomes a priority

The COVID-19 pandemic has drastically changed people’s priorities and their clothes shopping behaviour. Young people, especially Generation Z, who have previously driven sales of fashion, have become much less interested in following the latest trends and more concerned about the environment. This has led to the growing appeal of the preloved fashion market.

Gen Z: a core consumer

There are clear similarities between Depop and Etsy, with both their marketplace models relying on sellers to store and ship inventory rather than the platform, and this has given it an advantage over rivals such as Thredup and The RealReal that have higher cost bases.

Both businesses’ customer base skews younger, but this is particularly true for Depop, as its core audience is those aged 16 to 19.

Depop describes itself as “the fashion marketplace app where the next generation come to discover unique items.”

Source: Depop

This higher level of engagement among younger shoppers owes much to Depop’s app format, which echoes that of a social media network with an influencer-based approach to selling fashion, which has made it very popular among young consumers, with a strong following on TikTok and Snapchat.

Gen Z is becoming an increasingly important audience for businesses and advertisers as its constituents continue to emerge into adulthood and Etsy’s purchase of Depop will provide the business with additional data and insight into this influential young consumer.

What we think

Etsy acquiring Depop is a very significant move in fashion resale. While consumer spending on buying new clothes has declined over the last year, the second-hand clothing market is booming and Etsy’s acquisition of Depop highlights the growing potential for the fashion resale market. Alongside this, there has been a boom in marketplace platforms and this is a clear move from one of the traditional market leaders to consolidate its position by acquiring a specialist platform, which speaks to a different audience.