Although Etsy CEO Josh Silverman along with everybody does not know what’s going to happen with the coronavirus pandemic this year, yet he hopes that his company will “outpace e-commerce overall.”
Etsy is an American e-commerce website focused on handmade or vintage items and craft supplies. These items fall under a wide range of categories, including jewelry, bags, clothing, home décor and furniture, toys, art, as well as craft supplies and tools.
“None of us have a crystal ball,” Silverman said on “Squawk Box,” one day after the online marketplace reported much better than expected fourth-quarter earnings and revenue.
Etsy has been a big shot of the stay-at-home economy during Covid. E-commerce grew at over 40% year over year, and yet Etsy grew 2.5 times the rate of e-commerce. Silverman acknowledges the fact that during the year, e-commerce grew at a crazy rate.
Etsy’s full-year 2020 revenue amounted to $1.73 billion, up 111% year-over-year, while net income rose 264% to $349 million. Gross merchandise sales on the company’s marketplace — known for its independent artisans who offer a range of products — increased to $10.28 billion last year. That’s up from $4.97 billion in 2019.
The company, however, declined to issue full-year guidance due to the pandemic, offering it instead on a quarter-by-quarter basis. For the ongoing first quarter, Etsy said it expects revenue between $513 million and $536 million, significantly better than the $383 million Wall Street had been anticipating.
When discussed the company’s post-covid earnings, it was concluded that Etsy has already accomplished its 2023 business goals three years ahead of schedule. This has all been made possible due to the accelerated adoption of the online shopping trend. Considering the situation, the company also started essentially important new product categories on its marketplace, for instance, face masks.
However, the company’s CEO sees two competing forces for its position during the post-covid era. On the one side, there exist millions of people who typically shopped at brick-and-mortar stores before the pandemic has started buying goods online. On the other hand, retail will make up a smaller portion of consumer spending as a complete economic reopening occurs and more people return to eating at restaurants and traveling.
“What I don’t know — and what I don’t know that any of us know — is what’s going to happen to consumer spending overall as restrictions ease,” Silverman said. “What I do know is that if you look over the long term, if you’re looking at 2022 and 2023 and beyond, e-commerce is bigger and stronger, and we’ll be bigger and stronger I believe as a result.”