On Wednesday, Etsy reported first-quarter results for 2021, highlighted by the Etsy marketplace GMS hitting $2.9 billion, up 144.1% year-over-year. But similar to after eBay released its Q1 2021 earnings report, the stock took a dive on Thursday as the company expects growth to decelerate in the second quarter.
“Last year the world took notice of Etsy’s highly differentiated value proposition, and that incredible momentum has continued into the first quarter of 2021. We moved the needle by growing our team to deliver an exciting product roadmap aligned with our Right to Win strategy, and are executing a dynamic marketing strategy focused on driving frequency and keeping our buyers engaged. In a time when human connection is so vital, Etsy provides a one-of-a-kind community where sellers are empowered to grow their businesses, reaching buyers who value finding items that express their unique identity, while putting their money where their heart is.“Josh Silverman, Etsy, Inc. Chief Executive Officer.
Here are curated highlights for Etsy sellers and buyers from the Etsy first-quarter 2021 earnings call on Wednesday night. All bullet points are direct quotes. Editorial clarifications are noted in brackets.
Comments from Etsy CEO Josh Silverman
- Our Q1 results were excellent. Consolidated GMS was $3.1 billion, up 128% year-over-year. And that’s really the result of strength in the core and continued positive momentum in frequency.
- Etsy added 16 million new or reactivated buyers in the quarter for a total of 90 million active buyers up 91% year-over-year. And I am particularly pleased that our fastest growing segment yet again, was habitual buyers, our most loyal and engaged buyers. We now have 8 million habitual buyers, and that was up 200% year-over-year.
- It’s very encouraging to see that now 13% of app visits include a visit to the updates tab and 27% of those visits have buyers clicking on one or more of the listings that we include in updates.
- The search infra team made the search results faster, which resulted in increases in click and conversion rate and we are able to expand the search results for long-tail queries, leading to more satisfying buying experiences there as well.
- The Etsy homepage has been the rearview mirror for many years. You [buyer] show up on Etsy, and it’s things you’ve recently viewed or things you’ve recently favorited, or it’s a bunch of things you’ve already done. We’re moving much more now to show you more recommendations, more leaning forward, things you might like, things you haven’t seen.
- We also encourage conversations directly between the buyer and seller… those Convos help the buyer and seller to co-create, personalize or customize, or even just to form community.
- Sellers have now uploaded about 5 million videos to the Etsy site. That’s up 36% quarter-over-quarter. And we are seeing very encouraging progress when a listing includes a video that buyers engage with it more click and even convert more.
- Some of the videos that we’re finding are most mesmerizing are the making of videos. Customers seem very interested in how did you [seller] actually make this product and they can watch those for hours sometimes, it’s fun and inspiring and that’s uniquely Etsy. You’re not going to find that on other platforms.
- One of the most special parts of Etsy is that most things on Etsy can be personalized and customized. And in fact, we find that buyers are 20% more likely to make a purchase when they are looking for customized or personalized items.
- Etsy also has the advantage of being beloved by many influencers. So we’ve created a scalable experience where influencers can curate or co-create their own set of items, and then market those items to their own communities that reinforces the desirability, the quality, the diversity, and the scarcity of items on Etsy, and allows Etsy to reach out to diverse communities in ways that feel highly personal, curated and crave-worthy.
- When we ask customers now in both the U.S. and the UK a very generic question, which is just, what are your favorite places to shop online? Etsy is now top 10 in both of those two markets. And that’s the kind of thing we’re going for, that we’re top of mind and we’re not like what’s your favorite hand-made site, or what’s your favorite place to go for niche? Just what’s your favorite place to shop online? Etsy is now at top 10 site by our internal survey work in both the U.S. and the UK. And I think that’s really encouraging.
- Reverb also had an outstanding Q1. GMS grew about 50% or about 5x faster than the musical instrument industry and Reverb continues to deepen its moat, serving as the primary marketplace for many musicians.
- Reverb’s four key focus areas for 2021 are going to be around personalization, around partnerships with brands like Fender to market new gear, deepening its investments in growth in international, and continuing to improve the customer experience.
Complete Etsy Earnings Information
Please see the Etsy Investor Relations website for more details on the company’s first quarter 2021 results.
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