Why eBay Really Wants Depop's Young Users

$1.2 billion in cash. That's what eBay is paying for Depop, Etsy's secondhand clothing platform. The twist? Etsy bought Depop for $1.62 billion just five years ago. Despite taking a $400 million loss, Etsy's stock soared 14% after the announcement.

The Youth Problem

90% of Depop's users are under 34. For eBay, that's liquid gold. The 30-year-old platform has been struggling with an aging user base while younger shoppers flock to TikTok Shop, Instagram, and ultra-cheap alternatives like Temu and Shein.

"This acquisition presents an opportunity to advance one of our newest and fastest-growing Focus Categories," said eBay CEO Jamie Iannone. Translation: we desperately need younger customers.

Etsy's Strategic Retreat

Etsy's "house of brands" strategy has been a costly experiment. The company snapped up multiple niche marketplaces to compete with Amazon, only to unwind most deals. Brazilian e-commerce Elo7 was sold in 2023, musical instrument marketplace Reverb last year, and now Depop.

The market rewarded this retreat. Etsy's core platform has seen declining active buyers and gross merchandise volume, pressured by Trump's tariff policies and reduced consumer spending. Sometimes admitting failure is the smartest move.

The Real Competition

Here's the catch: buying Depop doesn't solve eBay's fundamental problem. Young consumers aren't just shopping on different platforms—they're shopping differently. They discover products through social media, expect instant gratification, and prioritize ultra-low prices over marketplace trust.

TikTok Shop processed over $100 billion in transactions last year. Shein and Temu have conditioned Gen Z to expect $5 dresses and free shipping. Can a traditional auction-style marketplace compete with that?

The Numbers Game

eBay's Q4 results look solid on paper: $2.97 billion revenue (beating estimates), 10% growth in gross merchandise volume to $21.2 billion. But growth is slowing, and the company is essentially buying its way into relevance with younger demographics.

The question isn't whether eBay can afford Depop—it's whether Depop's users will stick around once they're part of a 30-year-old platform.