You’d expect an e-commerce executive to guarantee that your next shipment will arrive within hours or even minutes in a world where we’re all accustomed to acquiring things quickly.
Josh Silverman, chief executive officer of Etsy, denies parallels to Amazon Prime.
“Toilet paper and socks are required. I want it to arrive immediately “He said. Something unique requires time.
The platform’s sales surged during the outbreak, but growth has subsequently halted.
During the lockdowns, when stores were closed and people were confined to their homes, many turned to online purchasing sites such as Etsy. The sales of face masks, home furnishings, and arts and crafts items all increased dramatically.
Since then, though, Etsy’s growth has slowed as the company adjusts to life post-lockdown.
In the three months leading up to the end of September, annual revenue growth was 11%, compared to 18% for the same time in the prior year.
Meanwhile, its stock price, which skyrocketed in March 2020, plummeted in the first half of this year.
Analysts cautioned that the company’s road forward will become more difficult now that the world has reopened.
Growth has unavoidably slowed in comparison to the Covid boom,” said retail expert Jonathan de Mello, who noted that other e-commerce companies have experienced the same obstacles.
“Customers’ desire to purchase gifts throughout the Christmas season will determine the company’s short-term success. Due to the rising cost of living, discretionary spending is projected to decline further in 2023, which would likely have an influence on Etsy given the relatively high prices of its products.”
Earlier this year, Etsy received opposition from sellers after it increased the transaction fees it charges them from 5% to 6.5%.
Some Etsy sellers went on strike as a result of the decision.
However, Mr. Silverman defended the move by stating that 6.5% is still “very inexpensive.”
“As a result, we’ve seen no seller churn,” he added. “We’ve also re-invested those funds back into the platform.”
He was similarly unfazed by this year’s share price decline. Since then, shares have recovered some ground, but they remain far below their all-time high.
“The world is attempting to make sense of the pandemic,” Mr. Silverman stated.
He said, “We do not measure our performance solely by the share price.”
With the reinstatement of physical store openings, e-commerce has had to work harder to keep customers. However, according to Mr. Silverman, those who visited Etsy during the lockdowns remain brand loyal.
“During the pandemic, millions of individuals were forced to utilize Etsy because they had few other options,” he explained.
Since the globe has reopened, it’s been a delight to see these individuals return repeatedly.
The cost-of-living crisis is an additional obstacle for merchants, as rising costs strain household finances.
This year, energy, gasoline, and food prices have skyrocketed due to increased demand for energy since Covid lockdowns were lifted and the ongoing conflict in Ukraine.
The rate of price growth in the United Kingdom has slowed significantly, although inflation remains near a 40-year high.
In a difficult economic context, Mr. Silverman believes that consumers will prioritize “cheap indulgences.”
“There is a great deal happening in the economy that is disturbing to a large number of people. This holiday season, people may purchase fewer items, but those items will have greater significance. This is Etsy’s sweet spot “he stated.
Etsy was created 17 years ago in Brooklyn, New York, and is renowned for its unique small merchants, who offer everything from crocheted penguins to furniture.
One of its important markets is the United Kingdom, where the vast majority of its nearly one million vendors are women.
During the epidemic, an influx of merchants joined the platform, as individuals stayed at home and turned to side jobs to earn extra money.
He stated that the return to the office has not diminished the desire of individuals to start their enterprises.
Etsy currently has over 5 million sellers on our core marketplace, up from approximately 2.2 million before the pandemic,” he said.
Etsy has begun acquiring additional online marketplaces in recent years.
It acquired Depop, a secondhand fashion app located in the United Kingdom, to target younger consumers.
Mr. Silverman described Depop at the time as “the resale hub for Generation Z consumers.”
Mr. De Mello, a retail expert, cautioned that the timing of the deal was “not ideal given the decline in e-commerce spending” this year. “Only time will tell” if the transaction is profitable for Etsy, he added.
