When Etsy launched nearly two decades ago, it was a haven for artisans and craft makers to sell their unique creations to a global audience. However, in recent years, the platform has been flooded with mass-produced items from resellers, overshadowing the handcrafted products that once defined Etsy. Now, CEO Josh Silverman is leading an initiative to restore Etsy's original mission of "keeping commerce human."
On Tuesday, Etsy unveiled a comprehensive overhaul of its site policies to make it clear which products truly belong on the platform. These changes include new labels to show how each item is created, whether handmade, designed by the seller, handpicked, or sourced. This move aims to reinforce Etsy's commitment to originality and authenticity.
“We're positioning ourselves to highlight the unique qualities that make Etsy special,” Silverman said. To support this policy shift, Etsy is launching a new marketing campaign featuring artisans at work, juxtaposed with imagery of robotic arms being dismantled.
Etsy's updated rules now require every product to include "a human touch" as defined by its creativity standards. This initiative comes as Etsy strives to retain buyers and sellers in an e-commerce market dominated by giants like Amazon and emerging competitors such as Temu and Shein. With the global e-commerce market projected to surpass $6 trillion this year, Etsy faces significant stakes.
Silverman noted, “There’s a race to the bottom in commoditized commerce, with everyone selling the same product cheaper or faster. Etsy needs to focus on what sets it apart.”
The platform has faced challenges adapting to changing market dynamics. Etsy's gross merchandise sales dropped 3.7% year-over-year in the latest quarter, and its stock value has plummeted by over 80% since its peak in late 2021. The company also laid off 11% of its workforce in December, citing a tough macroeconomic and competitive environment. Additionally, activist investor Elliott Management, now Etsy’s largest shareholder, has added pressure, with partner Marc Steinberg joining the board in February.
Since going public in 2015, Etsy has grappled with balancing its growth ambitions with maintaining its identity as a marketplace for unique, handcrafted goods. The pandemic saw a surge in Etsy's business, quadrupling its stock price in 2020 and doubling the number of sellers to 9 million by 2023. Despite this growth, the influx of mass-produced items has diluted the platform's distinctiveness.
Under the new rules, products like 3D-printed sculptures qualify as "made by a seller," but simply adding a sticker to a generic item won't suffice. AI-generated content must also meet specific criteria to be listed. These updates are designed to protect Etsy’s ethos and ensure that shoppers can easily find authentic, creative items.
Etsy’s journey to balance growth with its original mission has been challenging. Early sellers like Ashley Smith, who began offering custom wedding handkerchiefs in 2011, have seen the platform shift from a treasure trove of handmade goods to a marketplace crowded with generic products. Abby Glassenberg, a veteran Etsy seller of handmade stuffed animals, recognizes the appeal of scalability but acknowledges the irreplaceable value of truly handmade items.
As Etsy navigates a competitive landscape, it is doubling down on its core values. While cheap and fast products dominate the market, Etsy aims to stand out by celebrating craftsmanship and creativity. Silverman emphasized, “The solution for Etsy is to focus on what makes us unique, not to compete in the race to the bottom.”
With these bold changes, Etsy is reaffirming its commitment to being a platform for original, handmade goods, hoping to attract both new and returning buyers and sellers who appreciate the value of creativity and authenticity.
