Etsy CEO Josh Silverman on how the company can build off Covid success
Etsy hopes to tap into the network of social media influencers to help bring new people to its e-commerce marketplace, CEO Josh Silverman told CNBC on Thursday.
“So many influencers who love Etsy, who are passionate about Etsy and talk about Etsy to their community already, we’ve created a tool where those influencers can curate their own collection of their favorites on Etsy and then broadcast that out to their community and say, ‘Here’s what I love on Etsy,'” Silverman told Jim Cramer in a “Mad Money” interview.
“That shows the desirability, the specialness, the uniqueness, the scarcity of items on Etsy and it allows Etsy to reach many, many different diverse communities in ways that feel very personal to them,” Silverman added.
Silverman’s comments came one day after the company reported first-quarter earning results. Etsy said its quarterly revenue grew by 141.5% on a year-over-year to $550.6 million.
However, the stock tumbled more than 14% on Thursday as investors likely focused on Etsy’s second-quarter guidance. Etsy expects revenue to only grow between 15% and 25% on a year-over-year basis, a sharp slowdown from the previous quarter.
Despite that projected slowdown in growth, Silverman told Cramer he is comfortable with the demand dynamics Etsy is seeing.
“We had 90 million active buyers in the first quarter and, in fact, we had 8 million habitual buyers. These are our most loyal buyers that have bought on six or more purchase days and spent $200 or more, and that’s up 200%,” Silverman said. “So, we are absolutely delighted with what’s happening in terms of buyer activity and frequency and loyalty on Etsy.”
As consumer interests shift in a post-pandemic world, Silverman said Etsy is well-positioned to respond. That’s similar to how thousands of Etsy sellers began to make face masks last year after the Centers for Disease Control and Prevention first recommended Americans wear them to slow the spread of coronavirus.
“One of the great things about the Etsy model is that it is so dynamic, it is so responsive to consumer trends,” Silverman said. “There’s 100 million things for sale on Etsy right now and anything that is suddenly hot, for sure we’ve got some of them for sale on Etsy and if we do not, our sellers will be making them within hours to respond to that trend.”
Silverman also said Etsy’s two-sided marketplace generates trust between buyers and sellers that will be valuable in differentiating the company from other e-commerce players and helping propel long-term growth.
“Everyone else is playing Amazon’s game. They’re trying to sell you that same mass-produced stuff and try to ship a little faster than Amazon or sell it a little cheaper, and good luck,” Silverman said. “Etsy plays a different game. We lift up our sellers — now 4.5 million artisans, craftspeople — selling on Etsy that you can connect with directly and buy from.”