Etsy's customer traffic continues to decline! Will the fourth quarter be able to reverse the downward trend?

It is learned that according to foreign media reports, fewer and fewer people are buying and selling on the Etsy platform, and the number of new buyers on the platform has declined for three consecutive quarters, from 12.8 million in the fourth quarter of 2020 to 7 million in the third quarter of 2021. In addition, the number of Etsy sellers also dropped from 5.23 million in the second quarter of 2021 to 5.2 million in the third quarter of 2021, the first decline in history.

According to Etsy data, its active buyers and returning buyers have fallen by 0.3% and 0.8% respectively in the past two quarters. However, its habitual buyers, that is, buyers who have purchased more than 6 days and spent more than $200 in the past 12 months, have only increased by 1.2% in the same period.

In response to the loss of sellers and buyers, Etsy has also launched a number of incentives. On the buyer side, Etsy launched a delivery transparency feature that shows the expected delivery date of the product. This feature has also greatly improved the on-time delivery rate of sellers, and the number of delayed shipments has been reduced by half in the past nine months.

On the seller side, Etsy has implemented a "Star Seller" program to reward and motivate sellers with a special store badge. Data shows that the repeat purchase rate of star sellers is 25% higher than that of non-star sellers. In addition, shops with total sales of $10,000 or more are automatically eligible to advertise on websites other than Etsy.

In addition, in the past year, Etsy also acquired Brazilian e-commerce platform Elo7 and second-hand shopping platform Depop. Through Elo7, Etsy expects its Latin American market share to grow 20% annually over the next four years, and this acquisition has added 1.9 million active buyers and 56,000 active sellers to the platform in Brazil alone.

Second, through Depop, Etsy expects the secondhand e-commerce market to grow 11 times faster than apparel retail, reaching $77 billion in annual sales by 2025. This is consistent with Depop's $650 million in gross merchandise sales and $70 million in revenue in 2020, both of which increased 100% year-over-year.

Analysts pointed out that Etsy's financial report for the fourth quarter of 2021 is expected to reverse the downward trend, with its merchandise sales expected to reach US$3.9 billion to US$4.1 billion and revenue expected to reach US$660 million to US$690 million, which will mean year-on-year growth of approximately 11% and 9%, respectively.

TipRanks’ new Website Traffic tool examines Etsy’s monthly user statistics, showing that total estimated visits to the Etsy website rose in Q4. Notably, total global visits to etsy.com grew 12.3% quarter-over-quarter to 1.3 billion in Q4.

But website visits to etsy.com fell 8% in the fourth quarter of 2021 compared to the fourth quarter of 2020. Overall, the popularity of the Etsy platform continues to rise, and the increase in monthly visits may indicate an increase in gross merchandise sales in the fourth quarter.

Editor ✎ Xiao Zhu/

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