Etsy boss: It’s not about getting loo roll quick

In a world where we’ve all gotten used to getting things done faster, you’d expect an ecommerce boss to promise you that your next shipment would arrive within hours or even minutes.

Not so Etsy’s CEO Josh Silverman, who dismisses comparisons to Amazon Prime.

“I need toilet paper and socks. I want it to hit the ground running,” he told the BBC. “Something special takes time.”

Sales on the platform have doubled during the pandemic, but growth has slowed since then.

With stores closed and people stuck indoors during the lockdown, many turned to online shopping on platforms like Etsy. Sales of face masks, home furnishings and handicrafts boomed.

But since then, Etsy’s growth has slowed as it adapts to life after lockdown.

Revenue rose 11% year over year in the three months ended September, compared to growth of 18% in the same period last year.

Meanwhile, the stock price, which took off in March 2020, plummeted again in the first half of this year.

Analysts warned the company will find the way forward more difficult after the world opens up again.

“Growth has inevitably slowed compared to the Covid boom,” said retail analyst Jonathan de Mello, who pointed out that other e-commerce companies were facing similar challenges.

“Short-term fortunes will depend on customers’ willingness to give gifts during the holiday season. Given the increased cost of living, discretionary spending is expected to continue falling in 2023, which will no doubt have an impact on Etsy given the relatively high priced products.”

Etsy also faced protests from sellers earlier this year after increasing the transaction fees it charges them from 5% to 6.5%.

The move sparked outrage and prompted some Etsy sellers to go on strike.

However, Mr Silverman defended the decision, arguing that 6.5% was still “super affordable”.

“We didn’t see any seller churn as a result, and as we told the sellers, we put that back into the platform,” he added.

He was not deterred by the price decline this year either. Shares have since recovered somewhat, but are still a long way from the high.

“The world is trying to figure out what to think of the pandemic,” Silverman said.

“We don’t measure our success solely by the share price,” he added.

As physical stores are allowed to reopen, e-commerce will have to work harder to keep customers. But Mr Silverman says the people who came to Etsy during lockdown are staying loyal to the brand.

“During the pandemic, millions of people had to try Etsy because they had little choice,” he said.

“And what was really delightful is that since the world [has] reopened, these people keep coming back.”

The cost of living crisis is another challenge for retailers as rising prices put pressure on household budgets.

Consumer prices have risen this year as energy, fuel and food costs have skyrocketed thanks to higher energy demand since the easing of Covid lockdowns and the war in Ukraine.

In the UK, the rate of inflation has eased slightly, but inflation remains close to a 40-year high.

But Mr. Silverman believes that in a difficult economic climate, people will prioritize “affordable indulgences.”

“There is a lot going on in the economy, which is very worrying for a lot of people. This holiday season… they may buy fewer things, but those things will mean even more. And that’s Etsy’s sweet spot,” he said.

Established 17 years ago in Brooklyn, New York, Etsy is known for its distinctive little sellers selling everything from crocheted penguins to furniture.

The UK is one of its key markets, where there are almost a million sellers, the vast majority of whom are women.

During the pandemic, a new wave of sellers signed up on the platform as people turned to side businesses to make extra money while stuck at home.

But the return to offices hasn’t dampened people’s urge to start their own businesses, he said.

“Etsy now has over 5 million sellers selling on our core platform, up from about 2.2 million sellers before the pandemic,” he said.

In recent years, Etsy has started acquiring other online marketplaces.

Last year, it snapped up Depop, a UK-based second-hand fashion app, to appeal to younger shoppers.

At the time, Mr. Silverman described Depop as “the resale house for Gen Z consumers.”

However, retail analyst Mr. De Mello warned that the timing of the transaction “is not ideal given the decline in e-commerce spending” this year. “Time will tell” if the acquisition works for Etsy, he added.