Friday saw Etsy stock soaring on the markets with an overall share price rise of over 15%. It was a sweet victory for the online craft marketplace that had experienced a tricky 2021, but Etsy appears to be in a good place to outlast the pandemic.
Etsy’s stunning stock rise can be attributed to the recently released fourth-quarterly earnings reports. This shows that the online marketplace had managed to enjoy a growth in gross merchandise sales by over 16% on a year-over-year basis. With fourth-quarter sales of over $4 billion, it shows that Etsy had the clout necessary to perform on those key festive trading days like Black Friday.
Plus there is the fact that Etsy enjoyed a massive uptake in the number of active sellers to 7.5 million. This marked a 72% increase which has largely been attributed to the change in lifestyles as a result of the pandemic.
Buying figures weren’t quite so spectacular, but Etsy will have welcomed a 17% increase in the number of active buyers to over 96 million. What’s particularly significant is that it seems that customers are staying loyal to the Etsy brand with an increase of over 25% in the number of habitual buyers.
It was a welcome story of a brand that hasn’t been dramatically affected by the supply chain crisis that had dogged many tech companies for the past 12 months. This is entirely due to the fact that Etsy is largely populated by single-person retailers who haven’t had to deal with accelerating labor costs and have been relatively unharmed by the rising costs of fuel and materials.
Above all, the fact that Etsy’s revenue rose over 16% to $717 million was yet another validation of the fact that the new generation of ecommerce giants are here to stay. With 2021 showing that Etsy can successfully take advantage of the rising adoption of ecommerce, it seems that the online marketplace is on track to stay strong in the post-pandemic era.
A positive return from Etsy
The good news is that Etsy maintains that its bounce back is just beginning. The brand’s earnings report predicted that revenues would increase from $565 million to $590 million in the first quarter of 2022. This is expected to continue throughout the remainder of the year as the brand maintains its remarkable recovery after a difficult few months.
After all, Etsy’s stock price had fallen 20% in the first three weeks of February. Admittedly, Etsy wasn’t alone in suffering a big fall in value as concerns over the prospect of interest rate hikes affected the whole market.
But with rumors of decelerating growth and high valuations, it seemed that Etsy would suffer a similar fate to that which has damaged other tech brands such as Netflix and Facebook. But with an impressive rise in users and buyers, it seems that things are looking up for Etsy.
