OLD IS GOLD
Nandini Roy Choudhury, writer
News in brief
Etsy, a platform for craftsmen and craft manufacturers, is revamping its regulations to make it clear to buyers what goods belong on the platform. The company’s new policy change marketing campaign includes a TV ad with ceramicists, apparel makers, and other artists followed by a shattered robotic arm. The new platform guidelines demand all things to have “a human touch” according to creative requirements, and each product must be manufactured, developed, handpicked, or sourced by a vendor. Etsy aims to retain consumers and sellers despite competition from Amazon, Temu, and Shein, which provide fast, affordable delivery. The stakes are high, as eMarketer predicts a $6 trillion global e-commerce sector this year.
Etsy has struggled to maintain its reputation as a haven for unique, handcrafted goods while expanding its assortment to compete with larger retailers. Changes haven’t always pleased early sellers like Ashley Smith, who has sold bespoke wedding handkerchiefs on Etsy since 2011. Etsy has also allowed merchants to engage manufacturing partners, a major move that has faced criticism from early sellers.
Etsy CEO Josh Silverman advises the company not to play the “race to the bottom” in commoditized commerce.
News in details
When Etsy debuted about 20 years ago, it provided a platform for craftsmen and craft manufacturers to sell their items online and reach a wider audience. Recently, Etsy has been overwhelmed with mass-produced, generic things from resellers who have learned to game the internet and drown out artisan products.
Etsy CEO Josh Silverman wants the firm, which aims to “keep commerce human,” to return to its roots.
Silverman told CNBC that the firm would revamp its regulations on Tuesday to make it “crystal clear” to buyers what goods belong on Etsy. New labels on its website and app reveal how each vendor made an item.
By amplifying Etsy’s unique qualities, Silverman added, the company is ready to meet the need for handmade items and genuine people.
Etsy’s new policy change marketing campaign includes a TV ad with ceramicists, apparel makers, and other artists followed by a shattered robotic arm. New platform guidelines demand all things to have “a human touch” according to creative requirements. Each product must be manufactured, developed, handpicked, or sourced by a vendor.
Etsy aims to retain consumers and sellers despite competition from Amazon, Temu, and Shein, which provide fast, affordable delivery. The stakes are high, as eMarketer predicts a $6 trillion global e-commerce sector this year.
I feel like there’s a race to the bottom in commoditized commerce right now and practically everyone in e-commerce is playing that game, Silverman added. They’re offering the same goods for 2 cents less or shipping it two hours faster.
Etsy has grappled with market shifts. Gross merchandise sales fell 3.7% to $3 billion in the latest quarter. Since peaking in late 2021, the stock has dropped almost 80%. It’s down 32% in 2024, while the Nasdaq has risen 23% and closed at a record on Monday.
Silverman blamed the “very challenging macro and competitive environment” for Etsy’s 11% December layoffs.
Etsy’s largest investor, activist Elliott Management, owns 13% of the firm and is pressuring it. In February, Elliott partner Marc Steinberg joined Etsy’s board.
A roller coaster started earlier. Etsy went public in 2015, pushing it to meet shareholders’ growth goals, despite its feel-good, socially aware ethos.
Mask customers flooded Etsy during the epidemic, boosting revenue. The stock price quadrupled in 2020, and the number of enterprises selling items on the platform increased to 9 million by 2023.
Etsy has policed the site with “house rules” until recently. The main rule was that “everything listed for sale on Etsy must be handmade, vintage or a craft supply.” Resellers were banned.
The modified guidelines are more detailed and reflect current reality. A 3D-printed sculpture is “made by a seller.” It’s illegal to apply one sticker to a commercial face mask and call it handmade. Seller-prompted AI art, such as a dog in regalia, is considered “designed by a seller,” although digital downloads of “over 5000 ChatGPT prompts” are prohibited.
The growth challenge
Etsy has struggled for years to maintain its reputation as a haven for unique, handcrafted goods while expanding its assortment to compete with larger retailers. Changes haven’t always pleased early sellers like Ashley Smith.
Since 2011, Smith has sold bespoke wedding handkerchiefs on Etsy through The Polka Dotted Bee. Smith said Etsy used to be a place to “search endlessly for amazing things that people were making,” but now it sells generic items.
Ashley Smith started selling bespoke handkerchiefs on Etsy in 2011.
In 2013, Etsy permitted merchants to engage manufacturing partners, a major move. Sellers might use contract manufacturers instead of creating things.
Abby Glassenberg supported it. Glassenberg, who began her Etsy stuffed animal company in 2005, said she only needed to draw a template once and could sell “infinite copies,” reducing her effort. Her recreational Etsy shop became a full-time job, she added.
However, Glassenberg recognises the difficulty because many Etsy customers prefer the handmade experience.
“Handmade doesn’t scale,” she remarked. “We like it, humans like it.”
Glassenberg cited a hand-forged and cut fork.
“I’ll pay $120 for it, use it, and love it forever,” she added. “No one could make 100,000 of them a month, and that’s why we love it.”
Smith said the mainstream inclination for cheap and rapid items poses “an uphill battle for sellers and for Etsy” when competing on a larger scale.
Recently, Temu and Shein have expanded into the U.S., offering huge discounts on apparel, jewellery, household items, and other things. Silverman has said the sites “are taking a little bit of share from everyone.”
He now assures merchants and customers that the corporation will compete on its own terms.
Silverman advised Etsy not to play that game.
Source : CNBC News
