Etsy Inc.

    Etsy Inc. SWOT & PESTLE

    • Report

    • ID: 540126
    • 12 Pages
    • July 2022
    • Region: North America
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    About Etsy Inc.

    Etsy, Inc. is an e-commerce firm founded in June, 2005 by Robert Kalin, Chris Maguire and Haim Schoppik, who were owners of a company called iospace and later Jared Tarbell. It is headquartered at New York in USA. The company primarily focuses on sale of hand crafted or vintage goods and craft products. The site acts as a marketplace for over 85 million items ranging across 50 different retail categories like bags, clothes, jewellery, home décor, toys, artwork, masks etc. Etsy Inc. is a marketplace which brings together 4.4 million active sellers and about 82 million active buyers. Its consolidated Gross Merchandise Sales (GMS) amounted to $10.3 billion in 2020. In its initial years Etsy attracted attention for its use of new tools and unique functionality to aid sellers gain clients and traffic. By 2008 it was considered to be a significant rival to eBay. Etsy gained major popularity in 2009 when its users organised an “etsyday” promotion on Twitter. The company filed for an IPO in 2015 for $100 million and made significant acquisitions like Reverb (platform for buying and selling of used/new musical instruments) in 2019 and Depop (shopping app) in 2021. The firm consists of over 2,400 employees as of early 2022 and operates across seven markets which include US, UK, Australia, Canada, France, Germany and India.

Its Unique Selling Proposition or USP is its commitment to building a place where creativity lives and thrives. The firm’s site is basically modelled on traditional craft fairs which allow its sellers to have personal storefronts at the cost of $0.20 per item listed on its website. Etsy’s mission circles around “keeping commerce human”. In our modern automation times, people often opt for a machine-made product. Etsy seeks to reaffirm human connection at the heart of commerce. Its vision is to commit to craft, minimise waste, embrace differences, dig deeper and lead with optimism.

    Business Sector

    E-commerce

    Operating Geography

    United States, North America, Global

    Revenue

    US$ 2,329 million - FY ending 31st December 2021 (y-o-y growth 35.01%)

    US $1,725million - FY ending 31st December 2020

    SWOT

    SWOT Matrix for Etsy Inc.

    Strength

    Weakness
    1. Strategic acquisitions like Reverb increase its product portfolio offered on the platform
    2. Global reach of its marketplace improves revenues and reduces risk of depending on one geography
    3. Yearlong demand for the products offered in the online store
    4. Diversified revenue streams generated from marketplace and services offered
    5. Unique product portfolio and organic traffic base helps company grow sustainably
    1. Vulnerable to cyber-attacks and data breaches
    2. Relying on third party like Google Cloud and Amazon Web Services makes the company vulnerable to failures in operations
    3. Risk of counterfeits, infringes and illegal goods being sold in the marketplace

    Opportunity

    Threat
    1. Growing demand for online shopping among consumers
    2. Changing consumer behavior to shop more online after COVID-19
    1. Intense competition from other e-commerce players in the operating market
    2. Rising government regulations towards e-commerce companies may hamper operations

    Detailed SWOT Analysis of Etsy Inc.

    The detailed SWOT analysis for Etsy Inc. is presented below:

    Strength

    1. Strategic acquisitions like Reverb increase its product portfolio offered on the platform: In 2019, the e-commerce platform purchased Reverb, a well-known international website for buying and selling new, used, and vintage musical instruments. The business owns a thriving global community of buyers and sellers. As of December 31, 2021, 4.4 million active sellers and 90 million active buyers were connected through the Etsy and Reverb marketplaces. The company's marketplace currently offers close to 120 million items for sale across numerous retail categories. As a result of the acquisition, the business was able to generate $13.5 billion in gross merchandise sales (GMS), of which about 64 percent were generated by mobile purchases. The acquisition gave the business the opportunity to introduce new retail segments to its clients, expanding the platform to attract more customers and boosting profits. This gave the business the opportunity to expand internationally and establish itself as a major player in the musical instrument industry. When a seller, buyer, or both were located outside of the United States, 42% of its 2021 GMS was produced. With this acquisition, the company was able to expand into new markets and diversify its revenue streams. The company will be able to maintain its current course and generate increasing profits by making more strategic acquisitions.
    2. Global reach of its marketplace improves revenues and reduces risk of depending on one geography: In addition to sellers and customers in virtually every other nation on the planet, Etsy's seven core geographic markets are the US, UK, Germany, Canada, Australia, France, and, most recently, India. Due to its platform, it is simple for Etsy users to communicate with one another internationally even if they speak different languages and prefer to exchange money in different currencies. For the translation of listings, reviews, Etsy ads, and conversations between Etsy buyers and sellers, the company employs cutting-edge machine translation technology. Along with language processing, Etsy has made investments in localization in its international markets to give all Etsy buyers and sellers a fully localised experience.The company's payment platform enables Etsy sellers to provide a variety of payment options to Etsy customers. In 2021, 42% of Etsy sellers were based outside the country, and 38% of its gross merchandise sales (GMS) were generated by foreign-based sellers, buyers, or both. Through diversifying its buyers and sellers, the company can generate profits from various geographies rather than relying solely on one for all of its revenues.

    The remaining points in this section are available in the 'Complete Report' on purchase.

    Weakness

    This section is available only in the 'Complete Report' on purchase.

    Opportunity

    This section is available only in the 'Complete Report' on purchase.

    Threat

    This section is available only in the 'Complete Report' on purchase.

    PESTLE

    PESTLE Matrix for Etsy Inc.

    Political

    Economic
    1. Impact of US-China trade war on e-commerce platform
    2. Brexit and VAT charges impact on e-commerce in UK
    3. Impact of change to Biden administration on operations of e-commerce companies
    1. Impact of COVID-19 on online shopping companies

    Social

    Technological
    1. Increasing internet penetration may drive demand for online shopping
    2. Rising income levels lead to increased spending on ecommerce platforms
    1. Risk of cyber-attacks and data breaches for online shopping companies
    2. Use of digital technologies like AI and ML to improve e-commerce services

    Legal

    ENVIRONMENTAL
    1. Government regulations on e-commerce platforms in USA
    1. Increasing carbon footprint of the planet due to ecommerce

    Detailed PESTLE Analysis of Etsy Inc.

    The detailed PESTLE analysis for Etsy Inc. is presented below:

    POLITICAL

    This section is available only in the 'Complete Report' on purchase.

    ECONOMIC

    This section is available only in the 'Complete Report' on purchase.

    SOCIAL

    This section is available only in the 'Complete Report' on purchase.

    TECHNOLOGICAL

    1. Risk of cyber-attacks and data breaches for online shopping companies: When a customer makes an online purchase, they give the ecommerce company access to their financial and personal data. If that data is compromised, e-commerce businesses may also be held accountable by industry regulators in addition to having to answer to their clients and staff. Because they frequently store customers' usernames, passwords, email addresses, and other sensitive information, e-commerce businesses are particularly susceptible to cybersecurity threats. By copying credit cards and using consumers' personal information for fraud and identity theft, cybercriminals can use this information to generate income. Additionally, hackers may demand a ransom for sensitive data.The rules and consequences of data breaches must be made clear to e-commerce companies like Etsy, who must then improve their infrastructure and be able to protect customer data. Companies need to be made aware of some of the frequent attacks, including phishing, DDoS, malware, and ransomware. Only 26% of U.S. retailers' e-commerce cybersecurity platforms use encryption to protect their most sensitive data, according to the Thales Data Threat Report. Still, 41% of retailers do not believe that they need to invest in data security. Therefore, the businesses must strengthen their infrastructure and treat the threat of cyberattacks seriously.

    The remaining points in this section are available in the 'Complete Report' on purchase.

    LEGAL

    This section is available only in the 'Complete Report' on purchase.

    ENVIRONMENTAL

    This section is available only in the 'Complete Report' on purchase.

    More Info

    Major Competitors

    • Art fire,
    • Big Cartel,
    • Storenvy,
    • Shopify,
    • Aftcra

    Table of Contents

    • Company Overview
      • 1.1 About the Company
      • 1.2 Business Sector
      • 1.3 Operating Geography
      • 1.4 Revenue
    • SWOT Analysis
      • 2.1 SWOT Table/ SWOT Matrix
      • 2.2 Detailed SWOT Analysis
      • 2.3 Strength, Weakness, Opportunity and Threat
    • PESTLE Analysis
      • 3.1 PESTLE Table/ PESTLE Matrix
      • 3.2 Detailed PESTLE Analysis
      • 3.3 Political, Economic, Social, Technological, Legal and Environmental
    • Appendix
      • 4.1 Major Competitors
      • 4.2 Business Sectors / Diversification
      • 4.3 References used to prepare this reports
    • Conclusion
      • 5.1 Closing thoughts
      • 5.2 Methodology used to prepare this report
      • 5.3 Copyrights and Disclaimer

      References and Copyright

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