South Korean internet giant Naver Corp. announced this week it will acquire top secondhand apparel marketplace Poshmark Inc. for $1.20 billion. The deal is expected to close in Q1 2023.
The companies expect Poshmark to grow revenue more than 20% and cut costs by $30 million annually within two years, as a result of the acquisition. Poshmark will achieve this from using Naver’s advertising platform, expanding into live commerce and expanding overseas, the companies said in a statement.
Naver provides a suite of apps and services, including a search engine, advertising platform, social network and ecommerce platform. More than 36 million monthly users access its search portal and various online community services, according to Naver.
“Naver’s leading technology in search, AI recommendation and ecommerce tools will help power the next phase of Poshmark’s global growth,” Naver CEO Choi Soo-Yeon said in a statement.
A 20% growth, however, would be a slowdown from Poshmark’s usual annual GMV growth. In 2021, Poshmark’s GMV reached $1.82 billion, a 27.2% year-over-year increase.
Naver’s search and live shopping tools will likely bring more shoppers into the Poshmark ecosystem, says Michelle Bacharach, CEO of personalization vendor FindMine Inc.
“This deal is at the intersection of several major trends in ecommerce: re-commerce, discoverability, and the demand for expertise,” Bacharach said.
Poshmark joins more than a dozen other acquired North American retailers this year.
Poshmark is a leading marketplace
It launched in 2011 and is the 10th largest marketplace in the U.S. It’s also the 33rd largest in the world, as ranked by 2021 gross merchandise value, according to Digital Commerce 360. Among global apparel marketplaces, Poshmark is the fifth largest in the world.
Poshmark’s platform allows consumers to buy and sell their used apparel. Brands can also sell new apparel on the Poshmark platform. The marketplace also has expanded into cosmetics and home goods. 8% of online shoppers say they have shopped for apparel on a resale site, according to a Digital Commerce 360 and Bizrate Insights survey of 1,049 online shoppers in May 2021.
Poshmark has 80 million registered users. Its active users spend 25 minutes a day buying or selling online apparel, according to Poshmark.
Poshmark’s five-year compound annual growth rate is 43.5%. That’s faster than global apparel marketplace CAGR, at 32.7%, but it’s slower than the secondhand apparel marketplace CAGR of 50.1%.
Growing secondhand market online
Secondhand apparel marketplaces are growing faster than the median growth rate for the top 100 global marketplaces Digital Commerce 360 tracks. In 2021, secondhand apparel marketplaces grew GMV 25.4% year over year, compared with an 18.1% year-over-year GMV growth for the top 100.
However, this growth rate has slowed down in recent years, according to Digital Commerce 360 estimates.
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