Etsy, the online marketplace for handmade and vintage items, saw its active buyer count reach an all-time high in the second quarter of 2023. However, despite this positive development, the company’s gross sales remained stagnant.
During Q2, Etsy’s sales amounted to $3.0 billion, representing a slight decrease of 0.6% compared to the same period last year. Despite this, the company’s revenue saw a growth of 7.5% year over year, totaling $628.9 million.
Etsy experienced a 3% increase in active buyers, reaching a total of 91 million. The platform acquired 6 million new buyers and retained 21% more buyers compared to the previous year. Etsy highlighted its ability to retain active buyers at levels higher than those seen before the pandemic.
Despite the increase in active buyers, Etsy’s gross merchandise sales per active buyer declined by 6% to $128 in Q2. The number of habitual buyers remained largely unchanged at 7 million.
CEO Josh Silverman noted that more than a quarter of gross merchandise sales came from buyers who made a purchase within 14 days of their prior purchase. Additionally, he highlighted the contribution of new buyers from wedding registries, accounting for approximately 14% of gross merchandise sales. Silverman also mentioned that the company is experiencing higher-than-average order values for these items.
While Silverman acknowledged the early signs of stabilization in gross merchandise sales per buyer, he emphasized that increasing this metric is a top priority for the company.
Etsy ranked 17th in the 2023 Global Online Marketplaces Report by Digital Commerce 360. The company attributed its positive performance to its wide range of available items and the average search result, which yields over 1,000 listings. Silverman highlighted the efforts of the company’s product teams in enhancing buyers’ navigation and improving the discovery and inspiration experiences by using advanced AI technology.
The CEO also mentioned that Etsy has doubled the size of its Best of Etsy library, where expert merchandisers curate items based on their visual appeal, uniqueness, and craftsmanship. This library is utilized to train machine learning models that can better predict the quality of items as perceived by humans.
Regarding trust and safety, Silverman mentioned that the advancements in AI and machine learning have enabled the detection of an increasing number of policy violations, leading to a better buyer and seller experience.
In recent news, Etsy sold its Brazil-based handmade goods marketplace, Elo7, to Enjoei for $217 million. The company had acquired Elo7 in July 2021.
In conclusion, Etsy achieved record-high active buyer numbers during the second quarter of 2023. Although gross merchandise sales remained stagnant, the company experienced revenue growth. Etsy aims to prioritize increasing gross merchandise sales per buyer, while leveraging AI and machine learning to enhance buyer experiences and maintain trust and safety in its marketplace.
