Etsy Investing Behind Its Network as Demand Shows Signs of Improvement

Etsy has carved out an interesting competitive niche, jockeying for e-commerce wallet share across a variety of categories in the long tail of unbranded products. Its eponymous core marketplace is filled with artisanal crafts and customizable goods from predominantly small, hobbyist sellers, with about 30% of products made to order. While Etsy's unique inventory is a key differentiator and a point of strength, it has made marketing its fare broadly quite challenging. The company is leaning into brand marketing to build more awareness of its apparel platform, Depop. Recent mobile app and artificial intelligence investments have focused on improving buyer consideration, emphasizing product quality, and improving platform reliability, which we believe is appropriate.