Etsy Ends 2020 With 82 Million Active Buyers – Q4 and Full Year Earnings Call Highlights

Etsy announced its fourth-quarter and full-year 2020 financial results on Thursday. Etsy delivered a full-year consolidated GMS of $10.3 billion (up 107% YoY) and revenue of $1.7 billion (up 111% YoY) and its community expanded to 82 million active buyers, shopping from 4.4 million active sellers around the world as of 12/31/2020.

• Factors contributing to Etsy’s exceptional fourth-quarter performance included acceleration in non-mask product categories, better than expected macro conditions, successful product and marketing initiatives and an extended holiday buying season including a record-setting ‘Cyber Five’ on Etsy.com.
• Etsy’s peak holiday shopping day was Small Business Saturday — growth was up 150% (yoY), and generated over $50,000 in GMS per minute.
• Etsy brought in more than 61 million new and reactivated shoppers in 2020.
• Active sellers grew by 62% and, notably, GMS per seller was up 22%.

Here are curated highlights for Etsy sellers and buyers from the Etsy fourth-quarter and full-year earnings call on Thursday night. All bullet points are direct quotes. Editorial clarifications are noted in brackets.

Comments from Etsy CEO Joshua Silverman

• Etsy emerges transformed, a larger and stronger marketplace as a result. We understand that the stakes are high. Millions count on us now more so than ever, and I’m proud of our impact.
• We roughly achieved our 2023 [financial] aspirations in 2020.
• Etsy grew almost 2.5 times as fast as eCommerce.
• We were the fourth largest retail eCommerce site by monthly visits, and we’ve become one of the most recognized eCommerce brands in the United States. People suddenly mention Etsy in the same breath as much larger retailers like Walmart or Target or eBay.
• And it’s not just in the U.S. In fact, in the fourth quarter, international accounted for over 40% of all of the GMS on Etsy. I’d like to take a moment to talk about the United Kingdom, which had a truly breakout year in 2020 with a growth rate of 189% year-over-year. As fast as Etsy grew, Etsy UK grew much, much faster. And Germany, our second largest eCommerce market, also more than doubled in 2020.
• Etsy added twice as many new buyers in 2020 as they did in 2019. In fact, there were many weeks in 2020 where Etsy added more than one million new buyers per week, and we reactivated 22 million lapsed buyers.
• 50% of people who were mask-only buyers in the third quarter came back and bought a non mask item in the fourth quarter, which we think is really encouraging.
• Etsy is growing much faster than most players in home furnishings. And yet if you look at our total home furnishing sales versus the market for home furnishings, we are still a tiny part of the home furnishings market. And so I think there’s an enormous amount of opportunity for Etsy to grow in home furnishings as with other categories.
• We made significant strides in marketing in 2020, expanding the visibility of our brand globally. Our brand team launched five different creative campaigns in the U.S., the UK and Germany, with a record number of impressions and share of voice to cut through.
• We work very hard to make customer support at Etsy ever more human. In fact, in the fourth quarter of 2020, 73% of customer contacts were handled real-time, meaning they’re voice or chat, which is quite a dramatic change from where we were just two years ago.
• Personalization is a very important focus, helping people to find things they didn’t even ask for but know it when they see it. And we’ve barely begun to unpack the opportunity in personalization.
• Etsy’s economic output is now similar to the city of Houston.
• As we look forward over many years, we continue to believe that eCommerce is consolidating around fewer and fewer scaled e-commerce platforms. And we believe that Etsy is better positioned than ever to be one of those few scaled platforms, a brand which rises above the rest by standing for something truly unique and different, standing for the individual creators and for keeping commerce human.

Comments from Etsy CFO Rachel Glaser

• We also continue to see growth in our top six categories with homewares and home furnishings, our largest and fastest-growing category, growing 226% during the five days of Thanksgiving to Cyber Monday.
• Following the steady trend of 93% year-over-year growth in Q2 and Q3, non mask GMS growth accelerated sequentially to 118% in Q4.
• Etsy’s Offsite Ads continue to yield encouraging returns, with opt-out rates remaining less than 2%.
• From a seller’s perspective, the return on ad spend is in the range of 6 times to 8 times on the high end for any ad product. And this is a risk-free investment since the seller only pays the fee when she makes a sale.
• [We] can already see that February relative to January is less strong without that boost from stimulus. Furthermore, the recent weather events in the South and the Pacific Northwest had a very clear impact on our GMS in the past week, another reminder that certain unpredictable macro events beyond our control are apt to create volatility in our performance.
• The percentage of buyers that had two or more purchases in 2020 was 48%. That’s up from 41% a year ago. And when you look at those — that category of buyers that have two or more purchases, the average was five purchases.
• We are opening up new channels for our Offsite Ads. We just announced, I think, yesterday that we have opened up some of our affiliate channels. So our sellers will now be able to have their products listed on many, many more sites than just the big ones, Google and Facebook. And so that’s exciting for them, and we want to help them put their marketing dollars to work in the highest ROI positive ways that we can, so that we’ll continue to optimize those channels.

Complete Etsy Earnings Information

Please see the Etsy Investor Relations website for more details on the company’s fourth-quarter and full-year 2020 results.

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