Etsy's Mobile-First Strategy and Depop Momentum Fuel Bullish Outlook for 2025
Etsy, Inc. (NASDAQ: ETSY), the global marketplace for unique and handmade goods, is showing signs of a strategic turnaround as it heads into the final stretch of 2025. Closing at $54.95 on January 29, the stock's forward P/E of 20.83 suggests investors are pricing in a recovery narrative, one increasingly supported by key operational metrics.
The company's decisive pivot to a mobile-first approach is bearing fruit. Data indicates Etsy's app ranking has surged approximately 30% year-over-year across major platforms, driving higher-quality traffic. This shift is critical: app users visit five times more frequently and convert 1.5 times more often than web visitors, making them the cornerstone of Etsy's long-term value strategy. Concurrently, the Depop platform, acquired in 2021, is experiencing a powerful resurgence with ranking gains near 50% YoY, adding a significant growth vector appealing to Gen Z and millennial shoppers.
Financially, this deeper engagement is translating into tangible results. Etsy's take rate—the percentage of gross merchandise sales it keeps as revenue—expanded to 24.9% in Q3, with revenue growth outpacing GMS growth. This underscores growing pricing power and seller investment in high-margin tools like Etsy Ads. While overall buyer growth remains soft, the platform is successfully extracting more value from its most active users, with global consumer usage up 6.5%.
Analyst & Investor Commentary:
"The data on mobile engagement is compelling and often overlooked," says Michael Torres, a portfolio manager at Horizon Capital. "Etsy is effectively monetizing a more dedicated user base. If macro headwinds subside, the leverage in their model could drive significant earnings upside."
"This feels like rearranging deck chairs," counters Sarah Chen, an independent retail analyst, with a sharper tone. "The core issue—stagnant new buyer growth—isn't solved by squeezing more from existing users. Depop is a bright spot, but it's not enough to offset the fundamental challenge of competing with Amazon and Temu on customer acquisition."
"As a long-time Etsy seller, the increased visibility from app traffic is real," notes David Miller, who runs a ceramics shop. "But the higher take rate cuts both ways. It funds better tools, but it also pressures my margins. The platform's health depends on balancing monetization with seller sustainability."
The bullish case rests on the compounding effect of these engagement and monetization tailwinds, positioning Etsy for a stronger-than-expected holiday quarter. However, the bear thesis—highlighting stagnant buyer growth and macroeconomic sensitivity—remains a relevant counterpoint, ensuring the investment debate around Etsy is far from settled.
Disclosure: None.