EcommerceBytes-NewsFlash, Number 2582 - July 08, 2011     1 of 3

Report Predicts Revenue Growth at Etsy Despite Seller Dissatisfaction

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A new report from Wall Street firm GreenCrest Capital says seller concerns spell trouble for online marketplace Etsy, but predicts revenue at will grow from $72 million in 2011 to $201 million in 2016.

GreenCrest Capital said its survey of over two dozen prolific Etsy sellers showed storefront concerns were reaching a crescendo. Over 80% of respondents had concerns about their Etsy experience. The most frequently cited irritants were regarding the effort required to maintain a sufficiently active storefront, financial considerations, competition with other sellers, privacy concerns, and Etsy's lack of technological capabilities, particularly product search.

GreenCrest Capital analysts Anupam Palit and Nitsan Hargil wrote that Etsy had only two options to address sellers concerns:

  • Reduce its already industry-low fees;
  • or make significant, margin-dilutive platform investments.

Handicraft Sales Expected to Lag Overall Ecommerce Growth Domestically
The analysts state that the domestic handicraft market represents less than 1% of U.S. retail sales and is highly fragmented, comprised primarily of thousands of small, independent retailers. They forecast online craft sales to grow at a compound annual growth rate of 9.4% over the next 5 years - "well ahead of offline sales, but behind our expected aggregate U.S. ecommerce market growth of 12%."

They estimate that revenue at Etsy will grow from $72 million in 2011 to $201 million in 2016.

GreenCrest Capital is a private equity firm that provides insight into leading late-stage private companies; its disclaimer warns that it does and seeks to do business with companies covered in its research reports; as a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of the report.

For more information about the full report or about GreenCrest, contact Anupam Palit at anupamp@greencrestcapital.com.

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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