Sales through Etsy Inc., an online marketplace for handcrafted goods, increased 20.4% for the third quarter ended Sept. 30.
Etsy, No. 13 in the Internet Retailer 2018 Online Marketplaces, reported gross merchandise sales, or the total value of goods transacted on the marketplace, of $922.5 million in Q3, up from $766.4 million in Q3 2017.
Revenue—which Etsy generates from listing fees, seller services and commissions on sales—grew 41.4% to $150.4 million for the third quarter from $106.4 million in the previous third quarter. Active buyers were up 17.0% to 37.1 million compared with 31.7 million during the same period last year.
“This is the fourth consecutive quarter that gross merchandise sales have grown faster than active buyers, evidence that we are seeing increased buyer activity on the platform,” said CEO Josh Silverman on a call transcribed by Seeking Alpha. The drivers behind that growth, Silverman said, were better landing pages and a new pricing structure that increased fees to 5% from 3.5%.
For landing pages, Etsy noticed that search engine traffic was almost all going to product pages, which highlighted a single product to purchase. If it wasn’t what the visitor was looking for, they would often bounce out of the site. So, Etsy has started building more robust landing pages that rank better on search engines and provide a larger view of what the marketplace offers.
The increase in fees was the bigger driver of increased revenue, according to Silverman. He said the fee hike didn’t result in sellers leaving. He also said there wasn’t evidence that the fee increase was passed along to consumers.
In other earnings news:
- Apparel brand Ralph Lauren Media LLC, No. 76 in theInternet Retailer 2018 Top 500, reported second-quarter digital sales rose 10% over the same period last year. That includes sales both through its own sites and through outside retailers’ sites, such as department stores and online-only retailers. On RalphLauren.com, sales rose 9% year over year. Exact figures were not disclosed.
During the quarter, which ended Sept. 29, the retailer also launched a directly operated Chinese e-commerce site, RalphLauren.cn. Revenue grew 20% in China across stores and digital sales, but Ralph Lauren pegs most of its growth to strong sales through Tmall’s Luxury Pavilion, JD.com and WeChat in its earnings release.
- Fashion apparel conglomerate Michael Kors Holdings Ltd. (No. 295) posted a 1.3% year-over-year decline in online sales for its namesake brand for its second quarter ended Sept. 29. It didn’t break out exact e-commerce sales, nor did it note exact numbers for online sales of Jimmy Choo, only noting “double-digit” growth for the quarter, according to CEO John Idol on an earnings call transcribed by Seeking Alpha. While the fashion house announced the acquisition of Versace in September, those numbers were not included in the filing because the deal isn’t expected to close until the end of the fourth quarter.
- Shoppers at office supply retailer Office Depot Inc. (No. 14) are buying online and picking up in store more often. Consumers are choosing that option 25% more since the start of the year, especially among small-business shoppers, according to CEO Gerry Smith in a call transcribed by Seeking Alpha.
- Groupon’s Groupon Goods division (No. 41) reported a 24.1% decline in revenue, to $6.6 million in the third quarter ended Sept. 30 from $8.7 million during the same period last year. International Goods revenue was down 40.9%, while U.S. sales were down 7.0%. The large international decline was due to a particularly strong third quarter in 2017, according to chief financial officer Michael Randolfi. He said that Q3 2017 Goods revenue from international was up 20%, and the decline is a correction from that increase.