“For Etsy, the opportunity is to use this technology to help buyers discover items that feel uniquely right for them, and to help our sellers reach more customers and grow their businesses,” Kruti Patel Goyal said on an earnings call Wednesday (Oct. 28). “And there’s an interesting paradox here: as AI makes it easier to create and replicate products at scale, we believe the human creativity, craftsmanship, and connection that have always made Etsy special will matter even more.”
Goyal made these comments to analysts as the eCommerce marketplace released quarterly earnings showing a 10.9% uptick in revenue.
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The results come days after the company announced new AI rules for Etsy as it tries to ensure that AI-generated products do not saturate its marketplace. These new regulations include a prohibition on AI-generated functional guides, along with a mandate that listings feature at least one real image of a product.
“The challenge is the vast array of tools available and the different ways sellers may use them,” James Ossman, Etsy’s vice president of customer operations, wrote in a Thursday (Oct. 22) blog post. “Some uses help sellers bring creative ideas to life or make the tedious tasks involved in running a business more efficient; others can obscure whether there was meaningful human involvement, or misrepresent what an item actually is. A blanket ban on AI tools would treat those uses as if they were the same.”
Goyal noted during the call that as synthetic products flood the web, authentic human craftsmanship is becoming the “ultimate luxury.”
And Etsy itself continues to employ AI tools. Aside from the launch of a seller assistant tool in beta, the company said it is expanding its gifting tool experience using information gleaned from its Gifting Assistant test.
“It has really been an opportunity for us to learn and experiment with a more conversational interface to understand how that enables people to shop more effectively. It has been a really great learning tool for us,” Goyal told analysts. “We are seeing that it is particularly effective in helping people, when they have broader, more complex queries, really effectively narrow down their search.”
Beyond the uptick in revenue, Etsy’s gross merchandise sales per active buyer rose 3.9%, as the company saw strong demand in home decor, jewelry, and vintage items. Combined with targeted marketing on TikTok that reaches Gen Z audiences, Etsy achieved a 6.2% lift in gross buyer additions.
Active buyers grew year-over-year for the first time in two years—reaching 88 million—while overall marketplace gross merchandise sales (GMS) rose 8.8% to $2.6 billion.
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