Need to Know
- Etsy reports winning 2020 figures, growing 111% since 2019.
- The third-party e-commerce marketplace, which hosts artisans and makers, brought in $1.73 billion in 2020.
- Etsy said it has attracted 61 million new or reactivated shoppers to its site and recorded nearly 160% growth in “habitual buyers.”
- Etsy attests its growth to the number of shoppers moving towards e-commerce during the pandemic, including those looking for handmade masks.
E-commerce marketplace Etsy has seen great success this past year, growing 111% in 2020, with the company citing the pandemic as a major explainer for the increased revenue.
According to Etsy’s CEO Josh Silverman, e-commerce as a whole grew 40%, and Etsy’s growth was almost triple the average. The company’s 2020 revenue totaled $1.73 billion, achieving Etsy’s 2023 business goals three years ahead of schedule.
The reason for the sudden spike in sales? In the early weeks of the pandemic, many shoppers turned to Etsy to find locally and handmade masks by artisan designers. Half of those buyers came back to buy something different later in the year.
And as the pandemic carries on, with retail businesses coming in and out of different stages of lockdown, consumers are looking for new ways to spend their money.
“During the pandemic, people can’t spend on travel, they can’t spend on dining, so they are spending a disproportionate share of wallet on retail, and when they’re spending on retail, they can’t go to the mall so they’re spending a disproportionate amount on e-commerce,” explained Silverman.
Additionally, consumers are spending more time at home and are shopping for home goods, home furnishings, and even wedding-related products, which are areas that Etsy hopes to further tap into.
In its most recent report, Etsy said it has attracted 61 million new or reactivated shoppers to its site and recorded nearly 160% growth in “habitual buyers.”
The popular marketplace has proven fruitful for merchants as well, with one artist selling over 100 items in her first month.
“[My business] was launched in June 2020 and it feels wonderous to see [it] up and running after all these years of dreaming about it,” said Etsy merchant Lois Calli-Smith. “I feel as though I am at the start of a very rewarding journey teaching people how to sew their own accessories.”
Silverman explains the appeal of a third-party marketplace for merchants: “Creating your own shop today is creating a lemonade stand in the desert. It’s harder and harder for an individual site to rise above the noise and become a brand that people can remember.”
Etsy fourth quarter earnings show soaring profits, 129% growth, and an 8% rise in stock.
While we all hope there is an eventual end to this pandemic, that doesn’t necessarily mean life will return to the normal we once knew. And for online retailers, that may be a good thing.
“What I don’t know — and what I don’t know that any of us know — is what’s going to happen to consumer spending overall as restrictions ease,” Silverman said. “What I do know is that if you look over the long term, if you’re looking at 2022 and 2023 and beyond, e-commerce is bigger and stronger, and we’ll be bigger and stronger I believe as a result.”