Discover the remarkable journey of Etsy and its 15-year ascent to huge success. Golden Owl Asia provides insights into the evolution of this online marketplace, the key factors behind its triumph, and the lessons it offers to aspiring entrepreneurs.
You might have heard of the new trending e-commerce site for homemade & hand-crafted products - Etsy. In 2019, Etsy's revenue was over 818 million USD, and its exponential growth is hard not to notice - a 35% increase on average each year. Everyone is getting so thrilled about buying and selling on Etsy. Some even compare having an Etsy profile and a Shopify store. But where does Etsy originate from? And how did the brand get big? Let's dig deep into the history of Etsy and its newfound success.
What is Etsy & How big is it now?
Achievements
Etsy has grabbed the interest of 2.1 million sellers and 39.4 million buyers by focusing on vintage and craft items. It was founded on June 18, 2005. That's 15 years ago! Meaning it's just been a rising star recently, which is rather long after its birth. Now they have more than 1200 employees.
How it works
All vintage items listed on Etsy must be at least 20 years old with detailed info about their origin. Etsy is the same as an open craft fair where each craftsperson is given a booth and can display their products at 0.2$ / item.
Buyers can search using a product description or browse through a list that includes Art, Home & Living, Jewelry, Women, Men, Kids, Vintage, Weddings, etc.
Payment can be made via Paypal.
The story behind Etsy's success
Technology Lover
Although it was not popular at first, in 2007, Etsy hit its first million sales. Etsy has shown a significant interest in technology development from its early years, frequently added new tools to help build traffic, and gained exposure for its sellers. The initiatives include Adobe Flash and a category taxonomy with tags.
Later in 2016, Etsy also stated that it had bought Blackbird Technologies at US$32.5 million for their AI software that has a search engine in the shopping context. Etsy changed CEO once in the early stages.
Social Media Presence
In 2011, Etsy's effort to introduce a facebook-like feature for sellers and buyers to connect and befriend each other was followed by several complaints. The purchase and rating history was made public. They quickly fixed this error afterward.
In 2015, promoted on Twitter with the keyword #Etsyday by users, Etsy gained much attention on social media ever since and experienced growth in revenue right after that.
Etsy was popular on social media because it involves many small businesses that already have their followers. These customers then follow the shops to their Etsy sites and explore several more similar craftsmanship brands.
During Covid-19, Etsy encourages vendors to start making facemasks to help fight against the pandemic. Facemasks take up 11% in sales revenue, which is about 24 million. And not just generating more sales, it is a step forward for Etsy's branding, too.
Funding & IPO
Etsy then raised 40$ million in its series F funding (2014) and later on filed for a $100 IPO. Etsy was generating a 1.9 billion transaction worth before going public in 2015. The investors have played an enormous role in supporting Etsy's expansion, yet their founders made many original achievements as mentioned above before the investors ever poured their money in.
From 2016 until now, Etsy acquired 1 AI startup and a music marketplace. They also changed the CEO once. All of which seem to be smart moves as the shares have more than quadrupled right during the pandemic in 2020
To conclude, Etsy's success results from the right business mindset and great decisions from the start. It was not an overnight success. The company went through a long phase of going unpublic before finally getting noticed, funded, and became huge. A big passion for technology, social media, and dedication to micro-businesses all added to their significant success today.
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