EBay to Acquire Depop in $1.2 Billion Deal as Resale Fashion Market Booms

eBay to Acquire Depop in $1.2 Billion Deal as Resale Fashion Market Booms

Online marketplace targets Gen Z growth as second-hand clothing demand accelerates

Online marketplace giant eBay has agreed to acquire UK-founded fashion resale platform Depop from Etsy for $1.2 billion (£890 million) in cash. The deal, expected to complete by mid-year, marks a significant strategic shift as eBay seeks to expand its presence in the fast-growing second-hand fashion market.

The transaction comes five years after Etsy bought Depop for $1.6 billion, highlighting a notable valuation reset but also renewed confidence in the resale sector.

Why eBay Is Buying Depop

Depop has built a strong brand among younger consumers, particularly Gen Z shoppers looking for affordable and sustainable fashion alternatives.

Key highlights include:

• Depop has three million active sellers and seven million active buyers.
• Nearly 90% of its users are under 34, giving eBay access to a younger demographic.
• The platform is known for its social-media-style marketplace model, blending commerce and community.

eBay’s Chief Executive Jamie Iannone said the acquisition strengthens its position in “pre-loved fashion”, a category experiencing structural growth as sustainability concerns influence buying habits.

The global resale apparel market has expanded rapidly in recent years, with industry reports suggesting it is growing significantly faster than traditional retail. Consumers facing cost-of-living pressures are also increasingly turning to second-hand platforms.

What This Means for Depop

Depop will retain its brand, name and platform under eBay ownership. This suggests eBay intends to preserve Depop’s identity rather than fully integrating it into its core marketplace.

Potential advantages for Depop include:

• Access to eBay’s global logistics and operational scale
• Enhanced marketing reach and cross-platform synergies
• Stronger monetisation through improved advertising and payment tools

Depop’s CEO Peter Semple described the deal as recognition of the company’s sustained growth trajectory.

Share Price Reaction and Market Impact

Following the announcement:

• eBay shares rose more than 7%, reflecting investor confidence in the strategic rationale.
• Etsy shares climbed close to 15%, likely driven by relief over improved capital allocation and liquidity from the sale.

How This Could Affect Share Value

For eBay:

• The deal may strengthen long-term revenue growth by deepening its exposure to resale fashion.
• Access to younger users could support user engagement and lifetime customer value.
• However, integration risks and acquisition costs may weigh on margins in the short term.

For Etsy:

• The sale provides capital that could be reinvested in its core handmade and craft marketplace.
• Investors may view the move as a refocus on profitability and operational discipline.

Overall, the transaction may be perceived as strategically positive for both companies, though execution will be key.

Broader Industry Context

The resale and circular fashion market has benefited from:

• Rising environmental awareness
• Increased digital commerce adoption
• Cost pressures driving demand for affordable alternatives

Major players including eBay and other resale platforms have sought to capitalise on this structural shift. If Depop’s growth accelerates under eBay ownership, the acquisition could enhance eBay’s competitive positioning against other global marketplaces.

Outlook for Investors

The eBay–Depop deal underscores confidence in the long-term expansion of second-hand fashion and digital resale platforms. If integration proceeds smoothly and user growth continues, eBay’s share price could benefit from renewed revenue momentum and improved demographic diversification.

Investors will now monitor:

• Depop’s revenue contribution in upcoming earnings reports
• User growth and monetisation metrics
• eBay’s ability to generate operational efficiencies from the acquisition

If these metrics show improvement, the acquisition could support sustained share price gains over the next 12–18 months.

Sources: (Sky.com, eBay & Etsy company reports)