Etsy SWOT Analysis 2024: In-Depth Report With Infographics

Etsy is a virtual marketplace where artisans can retail their customized products and services. Over its lifetime, the site has created strong communities of buyers and sellers and introduced new trends and changes in multiple industries as a result. To understand how Etsy has managed to grow as a market for the niche, we’ll go over the Etsy SWOT analysis.

Etsy: Company Overview

Etsy was launched in 2005 by a company called iospace. Led by Chris Maguire, Robert Kalin, and Haim Schoppik, the site gained massive attention in its 1st year for adding new functionality and tools to help its sellers. Banking on its horizontal marketing tactic, the site crossed 1.7 million sales in May 2007. Now, the site is an e-commerce giant with a market cap of $17.31 billion. Its headquartered in Brooklyn, New York, and employed a staff of 2,042 in 2022.

Product & Services of Etsy
Online Marketplace

Etsy Competitors
Amazon Handmade | eBay | Big Cartel | Aftcra | Shopify | Goimagine | Artful Home

Did You Know?

Founder Robert Kalin made the name Etsy from 3 languages, and it means “just because”.

Strengths – Etsy SWOT Analysis

Unique And Custom Product Range: Etsy has a vast collection of artisanal goods, most of which are custom-made and have many personalization options. The site features over 62 categories of products and over 200 subcategories of products, including jewelry, clothing, shoes, home décor, bath accessories, pet supplies, toys, games, and more. Another highlight of the site is its vintage section, which contains many interesting and intriguing items.

International Presence: In June 2020, 30% of the international sellers were from the UK, 11% from Canada, 7% from Germany and Australia each, and 6% from France. Russia, Italy, Ukraine, India, and Spain combined made up an additional 14%. In total, 38% of the sellers were from international spaces, while 62% of the sellers were still from the US. And in 2022 Q2, 43% of the sales made were international, giving Etsy a secure foothold in the international market space.

Startup And SME Breeding Ground: In 2021, Etsy served as a platform for over 7.5 million sellers from all over the world. The site is home to many startups and SMEs that cannot mass produce their products and emphasize quality rather than quantity. Etsy is providing these small sellers an opportunity to access a larger consumer base and creating a tight-knit community that is reliant on its platform. The site is also helping introduce external change, trend shifts, sustainable practices, and market growth through this practice.

Exploiting Personal Technology: Etsy’s electronics and accessories section contains niche and quirky products that can be tailored to the customer’s preferences. The technology sellers on Etsy offer simple services, such as engraving smartwatches and creating decals, to complex builds, such as 3D printed smartphone cases. Even during the pandemic, 42 million smartwatches, 2.5 billion android devices, and more than 1 billion apple devices were being used. These products are effectively exploiting the surge in interest in personal technology.

Seller-Friendly Business Model: Etsy makes use of the horizontal marketplace business model to great effect. In 2023, Etsy will be a proprietary and centralized virtual platform where 7.403 million sellers and 94 million buyers sell and buy niche products that would get lost in larger online retail platforms such as eBay or Amazon. Etsy earns from every listing, transaction, promotion, subscription, website building, and payment processing but charges very little compared to other platforms. This makes it the perfect choice for niche product sellers.

Weaknesses – Etsy SWOT Analysis

Problematic Listings: Etsy divides its 100 million product listings into many categories and subcategories. Unfortunately, many of these listings are categorized into the wrong sections. Some of these products are even falsely listed intentionally to create confusion and give a wrong impression of the product. Etsy found 4 million cases of fraudulent listings in 2020, which is 400% more than in 2019. But it cannot prevent these listings from appearing on its site.

Unexclusive Sellers: Etsy is not the exclusive platform for niche product sellers. Etsy sellers also post their listings on competitor sites such as Depop, Shopify, Folksy, Artcra, Bonanza, ArtFire, and Amazon Handmade. 56% of the sellers found on Etsy in 2022 were selling on other platforms, and many had the same items listed. Because of Etsy’s management and regulation issues, the site cannot create exclusive sellers.

Inefficient Marketing: While Etsy $654.80 million on marketing, it’s inefficient and ineffective. Etsy uses its blog’s SEO articles, PPC, and selective search suggestions to boost its seller’s customer base. For itself, Etsy uses advertising, influencers, and digital campaigns but chooses to spend over 85% on advertising. However, Etsy still relies on Google searches more than backlinks for its site traffic, which isn’t a great use of the marketing budget.

Unregulated Pricing: Etsy is a site for artisanal goods and services, and it doesn’t regulate pricing on any listings. This causes many sellers to feel confused as they have no standard that can use to determine the product price. Unregulated sellers can artificially raise the overall market price by increasing the price by outrageous amounts. Also, inexperienced sellers can sell at a loss to gain traction, and Etsy cannot protect them.

Opportunities – Etsy SWOT Analysis

Capitalizing On Female Sellers: In 2022, 86% of sellers on Etsy were women, and 95% of the sellers were running their business from home. 32% of the sellers on Etsy are using their business as their sole occupation. Etsy can segment its platform to create a section that caters entirely to women and hire more female staff for customer service. By marketing itself as a way for women to seek financial freedom and empowerment, it can gain more traffic.

Using Local SEO And Local Currency: Etsy made more than $606 million in revenue in 2021 from international buyers. The company can target international markets better by geolocating its buyers and suggesting products based on market and user trends. The site can also accept payment in local currency and use local payment channels. It wouldn’t be safe in every country, but it can do this for its biggest international markets.

Higher Focus On Community: Over 71% of the sellers on Etsy believe that they should expand their business through responsible and sustainable means. Around 25% of the international sellers have joined one of its 10,000 teams. Etsy already emphasizes both of these aspects, but it can create exclusive sellers by encouraging sustainable practices through forming teams. These sellers will find using Etsy exclusively more convenient and are less likely to conduct business elsewhere.

Threats – Etsy SWOT Analysis

Hosting Illegal Goods: Etsy has come under fire before for selling questionable and illegal products before. An investigation by Insider claimed in 2021 to have unearthed over 800 listings selling pornography, weapons, animal excrements, and pseudoscientific cures. Etsy attempted to defend itself, which only caused it to lose value. Too many of these incidents can get the authorities involved.

Lowering Asian Interest: In 2016, many Asian sellers were available on Etsy, including smaller countries with no presence on other platforms. Etsy had 40 sellers from Nepal, 37 from Saudi Arabia, 60 from Sri Lanka, 27 from Bangladesh, and more. In 2022, most, if not all, of these sellers cannot be found on the platform. If anything causes Indian sellers to retract from the platform, then Etsy can risk losing its Asian market altogether.

Aggressive Corporations: Etsy stands as a competitor for many corporations across many industries thanks to its diverse product range. Offering quality, artisanal, personalized products often attracts powerful buyers away from mass-produced counterparts. If Etsy develops a diverse customer base with high purchasing power, these corporations can target its business.

[Bonus Infographic] SWOT Analysis of Etsy

Recommendations for Etsy

To enhance its growth and revenue, Etsy can follow these suggestions.

• Etsy should consider optimizing its website’s search function to respond to more specific keywords.
• Etsy should have a better verification system in place that checks if the item listed is on its ban list or considered illegal.
• The site can offer its sellers’ pricing suggestions based on its collected data from sales and also offer an option to seek help from support if they are subscribed.
• The site can collect user data and present a report to its sellers stating which subcategories have sold the most within their category and which products were the most popular.
• Etsy can optimize its site for Android System WebView to access user data on phones and show suggestions based on user activity.

Frequently Asked Questions (FAQs)

Final Words on Etsy SWOT Analysis

Etsy is a virtual platform that has effectively capitalized on community and sustainability. It’s also a niche market, which lowers the chances of competition. However, Etsy is now faced with strong competitors and is forced to share sellers and buyers with them. If it doesn’t resolve its policy issues and fails at optimizing its website, this virtual platform may face a shutdown.

References

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