Need to Know
- The online DIY retail platform Etsy posted a profit of $96.4 million for Q2, a 400% increase from this time last year.
- Etsy’s revenue was $429 million, itself a 137% year-over-year increase.
- The company now has 3.1 million sellers and more than 60 million active buyers.
- Home furnishings were the most profitable category, with sales growing 125% as the COVID-19 lockdown led many to consider changes to their living space.
Work-from-home and lockdown measures have benefitted e-commerce platform Etsy, with the company posting a Q2 revenue of $429 million this week, a 137% increase from this time last year.
Profit was also up by a substantial margin for Etsy, at $96.4 million for the second quarter of 2020, up 400% year-over-year. The company, which connects vendors—from independent designers and craftspeople to vintage goods and antique dealers—to buyers, now has 3.1 million sellers and more than 60 million active buyers.
Etsy has attracted and captured new customers during the pandemic, as more individuals are shopping online, and work-from-home measures seem to have benefitted the company: sales in the home furnishings category grew by 125% in Q2. Indeed, in response to an increase in search volume for wall art and decor, the company introduced an AR viewing option to its iOS app earlier this year.
“This is a moment when we have a chance to win the loyalty of millions of people and we’re working so hard to do that,” Etsy CEO Josh Silverman said in an interview on CNBC’s Mad Money this week. “The challenge we have is being top of mind… because purchases are so habit-driven.”
“Our mission is keeping commerce human,” he continued. “You may have bought something nice from a department store, but did they send a handwritten note?”
Silverman added that Etsy is growing in all categories, not just home furnishings: the jewelry category raked in $1.2 billion over the last 12 months, while the apparel category earned $775 million over the same period. Etsy’s stocks also surged: From March to July, the company’s shares rose from under $30 a share to more than $100.
Etsy’s huge quarterly successes prime the company as an increasingly worthy e-commerce competitor to companies such as Shopify, whose value has also skyrocketed during COVID-19. That company’s second-quarter revenue rose 97% year over year, to $714.3, for Q2 of 2020. New Shopify stores, meanwhile, spiked by 71% over the quarter. Both companies, albeit two whose business models differ substantially, entered the COVID-19 pandemic well primed to cater to shifting consumer and vendor needs, as online commerce became vital to both buyers and sellers when global lockdown measures were imposed.