Depop’s peer-to-peer marketplace for secondhand fashion is the 10th-most-visited shopping site among Gen Z consumers in the U.S., according to Etsy. The site is primarily known for its vintage, streetwear and Y2K (late 1990s/early 2000s) fashion. Founded in 2011, the marketplace first launched in the UK and then expanded to the U.S. and Australia. Depop currently has approximately 30 million registered users across nearly 150 countries, 90% of whom are under the age of 26. The company brought in $650 million in gross merchandise sales (GMS) in 2020.
The acquisition is expected to close in Q3 2021, after which Depop will continue to be headquartered in London and operate as a standalone marketplace run by its existing leadership team.
“Depop is a vibrant, two-sided marketplace with a passionate community, a highly differentiated offering of unique items, and we believe, significant potential to further scale,” said Josh Silverman, CEO of Etsy in a statement. “Depop’s world-class management team and employees have done a fantastic job nurturing this community and driving organic, authentic growth in a way that aligns well with Etsy’s DNA and mission of ‘keeping commerce human.’ We see significant opportunities for shared expertise and growth synergies across what will now be a tremendous ‘house of brands’ portfolio of individually distinct, and very special, ecommerce brands.”
Etsy also owns Reverb, an online marketplace for vintage musical instruments. In outlining the rationale for the Depop acquisition, Etsy pointed specifically to the site’s cohort behavior: Depop had 4 million active buyers and 2 million active sellers in 2020. That same year, 75% of GMS came from existing cohorts, and approximately 75% of sellers were also buyers.
The resale market is currently experiencing explosive growth, particularly among younger, socially conscious consumers looking for sustainable ways to find unique fashions. Research from fellow resale marketplace ThredUP predicts that the secondhand market will grow at a CAGR of 39% through 2024 in the U.S., reaching $64 billion and ultimately becoming twice the size of the fast fashion sector globally.
An increasing number of traditional retailers also are boosting their resale profiles: Lululemon and Nike both launched resale programs in April 2020, and H&M just announced that the online secondhand marketplace it majority owns, Sellpy, will expand to 20 new countries across Europe.