Cyclical Pressures Weigh on Etsy's Growth Narrative, but Underlying Business Remains Healthy

Etsy has carved out an interesting competitive niche, jockeying for e-commerce wallet share across a variety of heterogeneous verticals in the long tail of unbranded products. The firm’s marketplace properties—Etsy, Reverb, and Depop—all target non-commoditized inventories (artisanal crafts, used musical instruments, and vintage clothing resale), generate commissions on third-party, peer to peer sales, and strive to create a “treasure hunt” experience around a unique, customizable, and consequently less price elastic product suite. The firm's core "Etsy" marketplace accounts for roughly 90% of consolidated gross merchandise volume (GMV).