For the first 6 months of the year, sales grew 91% on the online marketplace for handcrafted goods and its musical instruments marketplace Reverb.

The coronavirus pandemic is fueling robust growth for Etsy Inc., as consumers turn to the handcrafted goods marketplace for face masks and home furnishings.

Gross merchandise sales (GMS), or the total value of goods sold on Etsy.com and Reverb.com, grew 145.6% to $2.69 billion in the second quarter ended June 30, the marketplace reported Wednesday. Isolating sales on Etsy.com, the marketplace grew 125% in Q2 year over year.

For the first 6 months of the year, Etsy’s sales, including Reverb, reached $4.04 billion, up 90.8% from $2.12 billion during the same period a year ago. Looking only at Etsy.com, sales grew 71.4% year over year.

Etsy acquired musical instruments and gear marketplace Reverb in Q3 2019. Sales on Reverb were $227 million in Q2 and $395.3 million during the first 6 months of the year. The company did not report year-over-year growth for the marketplace, although it said Reverb had “unprecedented growth.” Both experienced musicians as well as novice buyers purchased on Reverb in Q2, the company says.

Etsy called on its sellers during the first week of April to make face masks after the White House announced guidelines that U.S. consumers should cover their mouths and nose outside of their homes to protect themselves and stop the spread of COVID-19. In the second quarter, which began April 1, Etsy sold $346 million worth of masks and more than 110,000 sellers sold at least one mask, CEO Josh Silverman said on a call discussing the results, according to a SeekingAlpha transcript.

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Masks weren’t the only reason shoppers turned to Etsy. Non-mask sales grew 93% in the second quarter, compared with 79% in April. In fact, just 7% of buyers during Q2 only purchased a mask. Housewares and home furnishing goods was the largest category in terms of sales; Etsy sellers sold more than $2 billion worth of home  merchandise in the second quarter, up 128% year over year, Silverman said on the call. That accounts for approximately 75% of Etsy Inc.’s Q2 GMS.

Part of Etsy’s appeal is its crafty sellers who are able to customize and personalize products. “If you need to furnish something for your new home office, why not get a custom-made desk made by a carpenter just for your size? If you’re going to get something nice for the summer to wear, why not buy a beautiful linen dress direct from the person who made it at a really valued price? If you need a painting for your wall, why not get a personalized portrait of your pet?” Silverman said.

There were 3.14 million active sellers on Etsy in Q2, up 34.6% from 2.33 million a year ago. The number of buyers grew 41.0% year over year to 60.27 million buyers. Etsy acquired nearly 12 million new buyers in Q2 and reactivated 7.2 million buyers.

Etsy is No. 18 in the Digital Commerce 360 Top 100 Online Marketplaces ranking. Reverb is No. 39.

Etsy’s new site features

Etsy launched several new features to its site during the quarter. For example, the company launched “saved searches,” which allows customers to view fresh results related to a saved search term when they visit Etsy.com. Etsy can also email customers with saved searches to alert them of new products or new discounts. 8% of visitors have at least one saved search, and 11% of customers with saved searches have returned to Etsy.com to interact with the same search.

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Additionally, Etsy launched a feature a few weeks ago that lets sellers upload videos of their items and already sellers have uploaded 700,000 videos. The company did not disclose how sellers’ videos impact conversion or purchases.

Etsy also launched an augmented reality feature to allow shoppers to view wall art in their homes. This is significant, executives said, because wall art is one of the most popular items sold on the marketplace.

What Etsy’s growth means

Like many other online retailers, it’s unclear how much of Etsy’s current growth will outlast the pandemic. Even so, signs point to Etsy once again grabbing hold of the niche it carved out for itself years ago.

Silverman said growth remains strong since April, with sales increasing more than 100% each month. In Q3, the company expects GMS to grow between 80-110% year over year.

One giant hurdle for retailers, especially online marketplaces, is differentiating themselves from their top competitor Amazon.com Inc. (No. 3 in the ranking of marketplaces). Etsy is proving that it can exist—and grow—in an Amazon world with its customized and personalized items, such as custom-made furniture or portraits. This is something Amazon has not been able to do at scale.

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At its current pace, Etsy is on track to grow at least three times faster than last year’s 26% GMS growth.

For the second quarter ended June 30, Etsy also reports:

  • Revenue of $428.7 million, up 136.7% from $181.1 million a year ago.
  • Net income of $96.4 million, up from $18.2 million.

For the first 6 months of the year, Etsy reports:

  • Revenue of $656.8 million, up 87.4% from $350.4 million.
  • Net income of $108.9 million, up from $49.8 million.

Percentage changes may not align exactly with dollar figures due to rounding.

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