The Clearing House Real-Time Payments World Map July 2024 Banner

Etsy Aims to Have Its Artisanal Cake and Eat it Too

Etsy

As eCommerce titans Amazon, Temu and Shein expand their reach, Etsy is attempting to reclaim its niche by emphasizing its original mission to support artisans and crafters, but the fine print shows considerable wiggle room for less handmade products.

The company posted a policy update Tuesday (July 9) noting that, in place of its “handmade” and “vintage” labels, it is instead categorizing products as “made by,” “designed by,” “sourced by” or “handpicked by” a given seller — a broader categorization.

“To reinforce what we stand for, so that everyone who comes to Etsy sees why we are different and what makes us so special, we’ve reorganized our policies into new Creativity Standards,” CEO Josh Silverman told sellers in a video message. “To be clear, this is about clarifying what is allowed on Etsy, not changing it. We’re not allowing new items that were prohibited before. Rather, the Creativity Standards underscore the specific work that a seller does for each item in our marketplace.”

When Etsy launched nearly two decades ago, it provided a sanctuary for artisans and craft makers, fostering a community centered on unique, handmade products. However, the platform has since struggled with an influx of mass-produced items, diluting its brand and frustrating its core sellers.

This approach, purportedly designed to attract consumers seeking unique, high-quality products, contrasts sharply with the mass-market strategies of Amazon and Temu. The PYMNTS Intelligence Whole Paycheck Report, which tracks Amazon’s market share across various sectors based on earnings reports as well as data from the U.S. Census Bureau and Bureau of Economic Analysis (BEA), calculates that Amazon secured 10% of overall consumer retail expenditure as of the end of 2023. That share was up from 7.4% just two years prior.

Silverman’s narrative is clear: Etsy will not compete with eCommerce giants on price and speed.

“The solution to that for Etsy is not to try to play that game,” he told CNBC.

Yet, the question remains whether these changes, which come with concerted marketing efforts, demonstrate a desire to push back on the changes that have taken the company further from its vintage and handmade origins or whether they may instead make it easier for sellers to diverge further from this artisan ethos.

For instance, the acceptance of 3D-printed sculptures as “made by” a seller, or AI-generated content as “designed by” a seller, raises questions about the authenticity Etsy is promoting. The language Silverman uses, stating that “the common thread” across products permitted on Etsy’s marketplace is “human imagination and involvement” is vague enough to allow for considerable divergence from the platform’s purported emphasis on artisanship.

Etsy’s recent financial performance underscores its challenges. In the first quarter of fiscal 2024, net income dropped $11.5 million year over year to $63 million, and consolidated gross merchandise sales dropped by 3.7% to $3 billion. An 11% workforce reduction in December, which the company attributed to a challenging macroeconomic environment, further points to the struggles the company has faced in recent years.

Ultimately, Etsy’s latest moves may reflect a strategic balancing act rather than a wholehearted embrace of its artisanal roots. Whether this approach will succeed in differentiating Etsy and securing its place in the eCommerce landscape remains to be seen.

For all PYMNTS retail coverage, subscribe to the daily Retail Newsletter.