Etsy has erased its pandemic-era gains, but eBay has held up better

Americans are spending more online than ever: last year, e-commerce sales soared to a record $1.2 trillion, making up ~18% of total retail sales in the final quarter. While trillion-dollar giants like Amazon and Alibaba dominate the online marketplace game, two of the original names in the space, eBay and Etsy, have had a wilder ride than most over the past five years.

Etsy exploded in the early pandemic, fueled by skyrocketing demand for homemade face masks. The surge didn’t stop there — its niche in handmade decor, gifts, and crafts made it a lockdown favorite, sending shares soaring. eBay also thrived, as consumers sold old items and hunted for collectibles, though its lockdown-induced rise was steadier.

However, as spending habits have normalized (and soaring inflation took its toll), consumers have cut back on custom-made goodies — a blow to Etsy’s marketplace. eBay, meanwhile, has proved more resilient as demand stayed steady, especially with global supply chain issues driving the need for used car parts. Since January 2020, eBay’s stock is up about 85%.

To reignite growth, and fend off cheaper, mass-producing rivals like Shein and Temu, Etsy started doubling down on its “artisan” identity last year, though the move is yet to bring shoppers back. Meanwhile, “re-commerce” giant eBay seems to have mostly dodged the consequences of the newer upstarts on the scene, as users still flock to the site to buy and sell pre-loved items.

Tariff twist

With tariff threats looming, Etsy and eBay might have an unexpected edge. For eBay, China-related sales make up just under 10% of total merchandise value, according to its latest earnings call. Etsy is even more insulated: 75% of total purchases happen domestically, making the 19-year-old company a “net beneficiary” of the ongoing trade war, according to CEO Josh Silverman last month. It’s important to note, though, that Silverman was speaking before President Trump’s tariff attentions had turned to Europe, where most of Etsy’s imports come from.