Etsy Just Took a Big Step Into MercadoLibre's Biggest Market

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Etsy Just Took a Big Step Into MercadoLibre's Biggest Market

Motley Fool2021-07-01

Etsy(NASDAQ:ETSY)just agreed to buy Elo7, a Brazilian marketplace for handmade items, for $217 million in cash. Etsy CEO Josh Silverman, who called Elo7 the "Etsy of Brazil", predicted the deal would ...

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jwijaya001
·2021-07-01
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·2021-07-01
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  2021-07-01
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Etsy CEO Josh Silverman, who called Elo7 the \"Etsy of Brazil\", predicted the deal would ...</p>\n\n<a href=\"https://www.fool.com/investing/2021/06/30/etsy-just-took-a-big-step-into-mercadolibres-bigge/\">Source Link</a>\n\n</div>\n","source":null,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Etsy Just Took a Big Step Into MercadoLibre's Biggest Market</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nEtsy Just Took a Big Step Into MercadoLibre's Biggest Market\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-07-01 13:52 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2021/06/30/etsy-just-took-a-big-step-into-mercadolibres-bigge/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Etsy(NASDAQ:ETSY)just agreed to buy Elo7, a Brazilian marketplace for handmade items, for $217 million in cash. Etsy CEO Josh Silverman, who called Elo7 the \"Etsy of Brazil\", predicted the deal would ...</p>\n\n<a href=\"https://www.fool.com/investing/2021/06/30/etsy-just-took-a-big-step-into-mercadolibres-bigge/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"ETSY","symbol_name":"Etsy, Inc.","start_time":0,"source_url":"https://www.fool.com/investing/2021/06/30/etsy-just-took-a-big-step-into-mercadolibres-bigge/","article_id":"1185577517","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=1185577517","pubTimestamp":1625118728,"sourceInfo":null,"weMediaInfo":null,"summary":"Etsy(NASDAQ:ETSY)just agreed to buy Elo7, a Brazilian marketplace for handmade items, for $217 milli","collect":0,"end_time":0,"defaultTopTitle":"fool.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"ETSY":"Etsy, Inc."},"translate_title":"Etsy刚刚向Mercadolibre最大的市场迈出了一大步","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"ETSY":0.9},"content_text":"Etsy(NASDAQ:ETSY)just agreed to buy Elo7, a Brazilian marketplace for handmade items, for $217 million in cash. Etsy CEO Josh Silverman, who called Elo7 the \"Etsy of Brazil\", predicted the deal would help the online retailer \"establish a foothold\" in Latin America -- \"an underpenetrated e-commerce region where Etsy currently does not have a meaningful customer base.\"\nElo7 connects approximately 1.9 million active buyers to 56,000 active sellers. Its marketplace offers about eight million items, the majority of which are made to order, across more than 40 categories. It generates over half of its gross merchandise sales (GMS) from \"special event and life moment\" categories, such as wedding, baby, home décor, and children's parties.\nElo7 is much smaller than Etsy, which ended last quarter with 90.7 million active buyers and 4.7 million active sellers. However, the acquisition will likely boost Etsy's international GMS, which surged 169% year-over-year last quarter and accounted for 42% of its total GMS.\nEtsy's expansion into Brazil makes sense, but calling Latin America an \"underpenetrated\" e-commerce market seems to ignoreMercadoLibre(NASDAQ:MELI), the region's top online marketplace. MercadoLibre generated 56% of its revenue in Brazil last quarter, and the country is still the company's third-fastest-growing market after Argentina and Mexico.\nIs Etsy underestimating MercadoLibre's strengths, or will it carve out a niche in Brazil's handmade market as it previously did in the U.S. againstAmazon(NASDAQ:AMZN)andeBay?\nElo7 vs. MercadoLibre\nEtsy calls Elo7 a \"top ten\" e-commerce site in Brazil, but the privately held company has never publicly disclosed its revenue or market share estimates. But with 1.9 million active buyers, it's clearly much smaller than MercadoLibre, which ended last quarter with 69.8 million unique active users. MercadoLibre also provides a dedicated section for handmade products.\nHowever, many analysts predicted Amazon would kill Etsy with the launch of its Handmade marketplace back in 2015 -- yet Etsy held its ground with its first-mover's advantage, simpler sign-up process, lower commissions, and more lenient rules regarding mailing lists and promotions.\nAt the end of 2015, Etsy served 24 million active buyers and 1.6 million active sellers. Since then, its numbers of buyers and sellers have nearly quadrupled and tripled, respectively -- so we shouldn't underestimate Elo7's ability to thrive in MercadoLibre's shadow, as Etsy did in Amazon's.\nFurthermore, the Latin American e-commerce market is still underpenetrated relative to other regions. Fidelity International, BTG Pactual Research, and Euromonitor peg Brazil's e-commerce penetration rate at just 12.5%, compared to 27.3% in China and 20.3% in the U.S. Other Latin American countries have even lower e-commerce penetration rates.\nTherefore, there might be plenty of room for Elo7, MercadoLibre, and other e-commerce companies to expand without trampling each other. The skeptics might claim Etsy will face an uphill battle -- especially since Amazon couldn't gain much ground in Latin America against MercadoLibre -- but Elo7's niche appeal as an artisan marketplace might help it avoid Amazon's fate.\nWhat does this acquisition mean for Etsy's investors?\nElo7 marks Etsy's third major acquisition in less than two years. It bought Reverb in 2019 to expand into the online musical instruments space, and recently agreed to buy the U.K.-based fashion resalemarketplace Depop.\nBoth of those acquisitions diversified Etsy's marketplace beyond handmade goods and expanded itsoverseas presence. Reverb's app is available in dozens of countries, while Depop serves more than 26 million active users in over 147 countries. Elo7 is another brick in that same wall.\nWe can clearly see the impact of the Reverb acquisition, along with the broader pandemic-induced boost in online shopping, on Etsy's overseas GMS growth in 2020 and the first quarter of 2021.\n\n\n\n\nMetric\nFY 2019\nFY 2020\nQ1 2021\n\n\nTotal GMS Growth (YOY)\n27%\n107%\n132%\n\n\nInternational GMS Growth (YOY)\n32%\n105%\n169%\n\n\nInternational GMS as a Percentage of Total GMS\n36%\n36%\n42%\n\n\n\nSOURCE: ETSY. YOY = YEAR-OVER-YEAR.\nEtsy's GMS growth at its core marketplace could decelerate as the pandemic passes, but Depop and Elo7 could still buoy its overseas GMS growth and gradually reduce its dependence on the domestic market.\nThe key takeaways\nEtsy's purchase of Elo7 faces clear risks. It will face fierce competition from MercadoLibre and other e-commerce marketplaces, while inflation -- which constantly reduces MercadoLibre's reported revenue -- could throttle its growth in U.S. dollars and reduce its overall benefit to Etsy's GMS growth.\nThat said, the acquisition is still a step in the right direction. If Elo7 carves out the same high-growth niche in Brazil as Etsy did in the U.S., it could grow significantly, boost Etsy's overseas GMS, and turn it into a major player in Latin America's growing e-commerce market.","kind":null,"is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":158913545,"gmtCreate":1625121078887,"gmtModify":1703736562492,"author":{"id":"3546931980334903","authorId":"3546931980334903","name":"jwijaya001","avatar":"https://static.tigerbbs.com/100ae6b79636c8b2aa8539b2f75a67a5","vip":1,"hat":"https://static.tigerbbs.com/0a8758340a08196056f8bc1e54805193","crmLevel":6,"crmLevelSwitch":0,"idStr":"3546931980334903","authorIdStr":"3546931980334903"},"htmlText":"Awesome&nbsp;","listText":"Awesome&nbsp;","text":"Awesome","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/158913545","repostId":1185577517,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":158996174,"gmtCreate":1625119272398,"gmtModify":1703736539218,"author":{"id":"3570598542159923","authorId":"3570598542159923","name":"ShawnKoh1","avatar":"https://static.tigerbbs.com/0045c4894f8a2755b17a9e8518df4d5e","vip":1,"crmLevel":4,"crmLevelSwitch":0,"idStr":"3570598542159923","authorIdStr":"3570598542159923"},"htmlText":"Like and comment","listText":"Like and comment","text":"Like and comment","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/158996174","repostId":1185577517,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":5089317,"gmtCreate":1625119667840,"gmtModify":1663230376143,"authorId":3562030717219265,"author":{"id":3562030717219265,"idStr":"3562030717219265","authorId":3562030717219265,"name":"YongJie","avatar":"https://static.tigerbbs.com/b62394bc1f2e9ceb953c1723f0bb72f2","vip":1,"crmLevel":5,"crmLevelSwitch":1,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":158996174,"type":1,"supId":0,"prevId":0,"content":"Ok","text":"Ok","html":"Ok"}],"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":39,"commentSize":2,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false}}