eBay Acquires Depop from Etsy in $1.2B Deal, Betting Big on Gen Z’s Love for Second-Hand Fashion

In a strategic move that signals the explosive growth of the second-hand fashion market, eBay has announced its acquisition of Depop from Etsy for approximately $1.2 billion. The deal, expected to close in the second quarter of this year, represents eBay’s ambitious play to capture the attention of younger, fashion-forward consumers who are increasingly turning to pre-loved clothing as both an economic and environmental choice.

Depop, the UK-based peer-to-peer fashion marketplace, has become a cultural phenomenon among Gen Z and Millennial shoppers, boasting around 7 million active buyers—nearly all under the age of 34—and more than 3 million active sellers. The platform recorded approximately $1 billion in gross merchandise value in 2025, with an impressive 60% year-over-year growth in the United States alone, demonstrating the accelerating shift toward circular fashion consumption.

This acquisition comes at a pivotal moment for the fashion industry. ThredUp, another major player in the second-hand apparel space, projects that the U.S. second-hand apparel market will grow from $28 billion in 2019 to $56 billion in 2025, while global market analysts estimate the worldwide second-hand fashion market at $210 billion in 2025, with projections suggesting it could exceed $580 billion by 2035. These staggering figures underscore the seismic shift occurring in how consumers approach clothing purchases.

The timing couldn’t be more relevant. A 2025 analysis of fast fashion pricing revealed an average increase of $17 across key clothing categories in the United States, with jackets and outerwear prices surging by 24%. As traditional retail becomes increasingly expensive, second-hand platforms offer budget-conscious consumers access to quality fashion at a fraction of the original cost.

Beyond economic considerations, environmental consciousness is driving this trend. The fashion industry contributes approximately 10% of global carbon emissions annually, with ultra-fast fashion giants like Shein and Zara facing mounting criticism for their environmental impact. Depop’s model directly challenges this unsustainable paradigm by extending the lifecycle of garments and reducing waste.

For eBay, this acquisition represents more than just adding another revenue stream—it’s about capturing a demographic that has eluded the platform for years. Fashion sales already represent an annual gross merchandise volume of more than $10 billion for eBay, and integrating Depop’s youthful, trend-savvy user base could significantly accelerate growth in this category.

The deal marks a dramatic reversal for Etsy, which purchased Depop for $1.6 billion in 2021 as part of its strategy to diversify beyond handmade and vintage items. That same year, Etsy also acquired Brazilian online marketplace Elo7 for $217 million and music gear marketplace Reverb in 2019. Now, all three acquisitions have been divested, suggesting a strategic pivot back to Etsy’s core marketplace strengths.

Etsy’s recent performance has been notably subdued, with year-over-year revenue growth slowing to just 2.2% in 2024, down from 7.1% in 2023. This deceleration prompted CEO Kruti Patel Goyal to acknowledge that the Depop sale allows the company to refocus on growing its main platform. Etsy plans to use the sale proceeds for general corporate purposes, continued share repurchases, and investment in its core marketplace.

“Depop has built a trusted, social-forward marketplace with strong momentum in the pre-loved fashion category, and we are confident that as part of eBay, Depop will be even more well-positioned for long-term growth, benefiting from our scale, complementary offerings and operational capabilities,” said Jamie Iannone, eBay’s CEO.

The acquisition represents a significant validation of the circular economy model, where products are kept in use for as long as possible, extracting maximum value before recovery and regeneration. This approach not only appeals to environmentally conscious consumers but also makes economic sense in an era of rising costs and supply chain uncertainties.

However, the integration won’t be without challenges. Depop’s community values its unique identity and social-first approach, which differs significantly from eBay’s more traditional marketplace model. Successfully merging these cultures while maintaining Depop’s appeal to its core demographic will be crucial for the acquisition’s success.

Meanwhile, eBay continues to streamline its operations, having slashed 1,000 jobs in 2024—9% of its workforce at the time. This cost-cutting measures alongside strategic acquisitions suggest a company in transition, seeking to balance efficiency with growth opportunities.

As the fashion industry grapples with sustainability demands and changing consumer preferences, this acquisition positions eBay at the forefront of what many consider the future of retail: a circular, community-driven marketplace where fashion is not just bought and sold, but celebrated, reimagined, and given new life.

Tags

second-hand fashion, Depop acquisition, eBay strategy, Gen Z shopping, circular economy, sustainable fashion, resale market growth, pre-loved clothing, fashion marketplace, Etsy divestment, environmental impact, fashion industry trends, peer-to-peer commerce, social commerce, vintage clothing boom, affordable fashion, retail transformation, sustainable consumption, fashion resale platform, marketplace consolidation

Viral Sentences

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