Etsy sells Depop: Second-hand fashion app joins eBay for $1.2bn

Depop, the resale clothing app that has gained immense popularity with Gen Z consumers, is being acquired by eBay for $1.2 billion (£890 million).

Etsy, the online marketplace, is divesting Depop just half a decade after purchasing the enterprise - originally founded in the UK - for $1.6 billion.

eBay aims for the acquisition to enable the longstanding auction company, now over three decades old, to "appeal to a younger audience in the growing re-commerce sector".

In recent times, platforms facilitating the purchase and sale of second-hand or "pre-loved" apparel and shoes have surged in popularity, as younger shoppers search for eco-friendly, budget-friendly options compared to conventional retail outlets.

Etsy’s stock increased by over 15% in after-hours trading, while eBay's stock saw an increase of nearly 6.5%.

It's reported by Etsy that approximately 90% of Depop's seven million active users are younger than 34.

The second-hand fashion marketplace also boasts over three million active sellers.

Depop has evolved into "one of the quickest-growing fashion resale marketplaces in the US," mentioned Kruti Patel Goyal, Etsy's chief executive officer.

She further stated, "I feel assured that Depop is well-situated for its next growth chapter with eBay."

In 2021, Etsy acquired Depop as part of significant acquisitions to contend with major online retail players such as Amazon.

However, Etsy has since retreated from many of those acquisitions.

In 2023, it parted with Elo7 - often dubbed as Brazil's counterpart to Etsy - at a financial loss after purchasing it for $217 million two years prior.

The previous year, Etsy announced its plans to sell Reverb, a musical instruments resale site it had acquired in 2019, in an effort to focus on its main operations.

The Etsy platform, known for promoting artisanal and unique products, enjoyed success during the Covid-19 pandemic as online shopping surged.

However, the company has faced challenges recently, dealing with reduced demand and intense competition in the crafts sector.