Etsy Q3 financial report interpretation: three growth drivers that cannot be ignored

It is learned that Etsy recently announced its third-quarter financial results, with both sales revenue and GMV achieving strong growth, and it is expected to continue to maintain rapid growth in the next few quarters.

In addition to the increase in consumer online shopping demand driven by the epidemic, there are three other easily overlooked drivers of Etsy's growth.

1. New buyers have diversified demands

Etsy's third-quarter financial report showed that active buyers grew 38% to nearly 96 million, and active sellers grew 103% to 7.5 million. However, these sellers and buyers are not all from Etsy.com.

Etsy.com has more than 89 million unique buyers and 5.2 million active sellers, according to Etsy, meaning the rest comes from its music equipment marketplace Reverb and recent acquisitions Elo7 (the “Etsy of Brazil”) and Depop (a secondhand fashion reseller popular with young shoppers).

Consumers are seeking alternatives to handcrafted goods, and Etsy is applying its successful Etsy.com model to these new markets, which will help Etsy maintain its user growth in the coming years.

2. Advertising revenue is on the rise

Etsy makes money primarily through a small listing fee and a percentage of sales commission, but merchandise sales are not the only driver of revenue. After GMS growth, advertising was the second largest driver of growth in the third quarter, up 28% year-over-year.

Etsy is improving its advertising platform, a segment that holds huge potential for Etsy, and it will expand its new technology to other marketplaces such as Elo7 and Depop in the coming years.

3. Increased repurchase rate

Data shows that the number of buyers on Etsy who made two purchases in the past 12 months increased 35% year-on-year to 36 million last quarter. Habitual buyers (who purchase goods six times or more and worth at least $200) increased 65% to nearly 8 million.

In addition to the two measures mentioned above that help increase repurchase rates, Etsy's fast and reliable logistics and transportation also promote the increase in repurchase rates. Since the beginning of 2021, Etsy's delayed delivery rate has decreased by 50%, which is even more advantageous in the context of the global supply chain crisis.

Editor ✎ Xiao Zhu/

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