Fashion retail and pure play brands: ignore Etsy’s $1.6bn acquisition of Depop at your peril

Tilly Brogan
January 25, 2024

The Atlantic described Depop, founded in 2011, as: ‘a little bit eBay, a little bit Instagram.’ A third of UK 16-24 year olds in the UK have Depop. In turn, 2020 was a record breaking year for acquiring US users.

Depop’s has reportedly seen £650m sales through the platform last year with the app taking a £70m cut via selling fees (10% on all transactions.) The app has leveraged social selling and basic peer-to-peer eCommerce technology to great effect. Chic Depop users practically invented social selling; there can perhaps be no sales patter, or A+ content page, more authentic than simply viewing an item curated, modelled and evangelised by a seller. Depop sellers have developed their own lore: love hearted returns policies, gushing personal reviews, and mirror photoshoots in studiedly unselfconscious poses.

Most sellers are not using Depop as their main source of income – but rather as a side hustle. Typical of 2021, app technology and integrated checkouts have now enabled the cottage commodification of virtually everything. However, Depop’s rise is more unique to the category. Far from just selling curated vintage items of clothing and fashion rarities, the vast majority of users are reselling from fast fashion pure players and the high street (often with the tags still on.) The motivations for doing so are most likely the need, particularly amongst the young, to conserve capital and secondly the glut of fashion items in circulation make an easily viable retail opportunity with plenty of ready stock stored at home.

Depop is not just a venue for bargain hunting – it’s a signifier of good taste, strong environmental principles and a certain cachet. Depop’s tech, while a factor, is nothing in comparison to the cultural capital the app has generated amongst Gen Z across the UK and USA. As Gen Z come of age (and start to earn money), fast fashion in particular should look at the success of Depop and question whether their existing business models will cut ice with the next generation – not just Gen Z’s demand for better business ethics and environmental concerns, but their reworking of the nature of ‘fashion’.

Five takeaways from Etsy’s acquisition of Depop

  1. To Gen Z, fashion is less about changing styles, concepts and designs, and more about novelty, newness (to the consumer) within the confines of personal taste
  2. Depop’s 2020 growth in the US and widespread adoption in the UK comes at a time of squeezed pockets and anxiety – acutely felt amongst the young – about the future of the planet. Buying used goods is often comparable in price to buying new but the cost to the planet of the latter is thought extortionate by Gen Z
  3. Purchasing used fashion items is perceived to be more ethical than buying new but Depop’s growth is certainly augmented by the overproduction of hardly worn or never worn garments from fast fashion brands. One has to wonder whether there’s an element of ‘personal greenwashing’ alongside the desire to consume in Depop’s user base. However, older generations should cut the young some slack for engaging in what might be a simulacra of an economy they know they must ultimately opt-out of in order to save the planet
  4. Used fashion retailing, valued at upwards of $40bn per annum by BCG, is more a question of controlling the checkout than curating styles, brands and collections
  5. Gen Z are increasingly seeing all elements of the internet through the lens of their quest for individuality. For an intensely social generation (and arguably the most connected) a used clothes storefront is both a display of personal taste and an outward message of anti-consumption (as McKinsey puts it – ‘access’ rather than ‘possession’.)  After all, having great taste in films no longer requires ownership of DVDs but a subscription to Amazon Prime and an opinion

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