Etsy is a brand harmed by dizzying growth

Breaking into the online retail market and becoming a recognizable global brand alongside eBay, Amazon, or Alibaba is almost an impossible mission. Not for Etsy. This online marketplace for handmade goods brings together 1.7 million sellers who offer 40 million products in their online stores, which are browsed by 26.1 million users in over 190 countries. To celebrate its enormous success and its transformation from a modest American shop into a giant, the company launched its first global campaign with the slogan ‘Difference Makes Us’. The campaign, created for Etsy by the global agency Office of Baby, consists of a series of animated GIFs and video ads published across the virtual world, from YouTube and Facebook to Instagram. As Etsy’s marketing director Andre Rickerby stated for AdWeek, they waited a full eleven years to launch the campaign, and now it was time to celebrate their global presence and highlight the values and strength of the brand.

A double-edged sword However, many media outlets, especially in the past year, emphasize that Etsy has lost its charm and credibility precisely because of this growth. Due to the latter, it is assumed that the campaign was launched not to celebrate size but to salvage an image harmed by that dizzying growth. A year ago, The New York Times published an article stating that the success of Alicia Shaffer, owner of the store Three Bird Nest, highlighted all the shortcomings of this online marketplace. At that time, major American media were focused on the story of an entrepreneur who lost her job and decided to open a store on Etsy to sell knitted clothing and accessories. Over time, Shaffer’s business grew so much that she began to generate an income of an incredible $70,000 a month, which, of course, attracted media eager for stories about achieving the American dream. Articles celebrating the entrepreneur’s success sparked many online criticisms and accusations that there was no theoretical chance she could knit her products herself, but rather mass-produces and imports them from China or similar markets. Discussions about where the products on Etsy actually come from are not something the owners of that online platform would want to hear, as they built their strength on the claim that everything sold is handmade and soulful, and that is what distinguishes them from eBay or any other online retail giant. And although Etsy has denied claims that it has turned into a mass merchant of low-quality, factory-produced goods, much more will need to be done to convince customers that they are still just a slightly larger platform than they were when they were founded. By ‘slightly larger’, I mean enormous. Etsy managed to sell products worth $1.93 billion last year, which means its revenue (based on the percentage it takes from sellers) grew to $196 million, and it is likely that it will soon be listed on the stock exchange (Etsy’s IPO is in preparation). Because of this massiveness, customers, as well as sellers who sell their handmade goods through the platform, rightfully fear that Etsy has strayed far from its initial values. The original goal of the three designers from Brooklyn, the founders of the platform, was to create a collective that would be completely opposite to mass, soulless, and unecological production, focusing on unique handmade goods and connecting talented producers with an audience eager for original products.

Growth control However, the best sellers listed on Etsy found themselves unable to produce enough to meet demand, so it made sense for them to outsource part of their production or hire people to help them. This was against Etsy’s rules until 2013, when new CEO Chad Dickerson allowed some sellers to hire labor or engage other companies to produce according to their ideas. Etsy took on the responsibility of checking such sellers, who had to produce according to many standards, both environmental and related to labor rights. According to data from 2014, five thousand sellers on the platform had outsourced their production. Although this is a small percentage compared to the total number of sellers, the audience rebelled, especially after it became known to the media that a scarf from one of the sellers (which he claims is handmade) could be purchased at a significantly lower price in the Chinese online store Alibaba. Customers, as well as some sellers who stopped selling on the platform, claim that it is impossible to control such a large quantity of products on the platform and that its once competitive advantage – original handmade goods – is now just a marketing trick.

Denials from Etsy Such consumer doubt is understandable because Etsy has been much more than just a trading platform for them. The brand was their last line of defense against consumerism and mass production; they loved its authenticity and good old handmade production. For them, the platform was a more ethical alternative to online giants like eBay or Amazon. Due to the business concept and the type of producers that Etsy brings together, it is clear why they easily attract attention and arouse suspicion whenever a seller, like Shaffer, starts raking in millions from handmade goods. Etsy vehemently denies claims that it is unable to control sellers on the platform or that it does not live its values but merely advertises them. With the first global campaign launched last week, it attempted to shift the focus away from criticism and concentrate on what still distinguishes it from the competition. On this platform, mostly handmade goods from around the world are indeed sold, and a key competitive advantage is that these sellers sell only on it (or on personal pages on Facebook, Instagram, or similar). Or, as the marketing chief stated, ninety percent of customers come to Etsy because they want to buy something different and more original than what they can find in any shopping mall, which they want to advertise with the campaign. It is quite possible that this campaign, precisely because of its intensity, will succeed in attracting customers who previously did not know about the platform, but the question remains whether it will manage to convince the skeptics that it is still – despite rapid growth – the good old humble Etsy.