Etsy has made headlines with its announcement that eBay will acquire its fashion resale marketplace, Depop, for approximately $1.2 billion. This move is set to enhance eBay’s consumer-to-consumer (C2C) capabilities, particularly within the lucrative and ever-evolving fashion industry, while allowing Etsy to concentrate on its core marketplace operations.

Etsy’s decision to divest from Depop aligns with its intent to drive sustainable growth within its primary platform. The evolving landscape of online commerce presents opportunities for small business owners, especially those who prioritize niche markets and sustainability.

eBay’s acquisition of Depop signifies a strategic shift in the resale market, projected to deepen eBay’s engagement with younger consumers, particularly Gen Z and Millennials. Depop has cultivated an active community, with approximately 7 million active buyers—90% of whom are under the age of 34—and over 3 million active sellers. The platform recorded around $1 billion in gross merchandise sales in 2025, showcasing a vigorous year-over-year growth rate of nearly 60% in the U.S.

Jamie Ianonne, CEO of eBay, commented, “A key C2C driver, fashion represents more than $10 billion in annual gross merchandise volume for eBay… This acquisition presents an opportunity to advance one of our newest and fastest-growing Focus Categories.” The strategic goal here is clear: to position eBay as a leader in the fashion resale market while enhancing the range of offerings to young, eco-conscious consumers.

For small business owners, particularly those operating within the fashion space, this acquisition opens several avenues for growth. The partnership will leverage eBay’s extensive infrastructure, financial services, and shipping solutions. Such capabilities can significantly enhance the selling experience for small entrepreneurs and provide them with tools to better navigate the complexities of e-commerce.

Kruti Patel Goyal, CEO of Etsy, expressed enthusiasm about Etsy’s renewed focus: “We believe this transaction is a great outcome for Etsy’s shareholders, and a positive next step for all involved.” Etsy plans to use the proceeds from the sale for various corporate purposes, including share repurchases and investments geared toward enhancing its primary marketplace. This renewed emphasis on its own platform could foster innovation that benefits the independent sellers that Etsy is known for.

However, small business owners should also consider potential challenges stemming from this transition. As eBay integrates Depop into its ecosystem, there could be shifts in seller fees, platform policies, and community dynamics. Entrepreneurs relying on Depop as their primary selling channel may experience disruptions, which could necessitate adjustments in their operational strategies.

Furthermore, eBay will likely introduce additional features aimed at enhancing the buying and selling experience on Depop. This could create a competitive edge but might also lead to an influx of sellers into the marketplace. Small business owners will have to stay agile and responsive to changing dynamics if they want to stand out in a more crowded field.

Peter Semple, CEO of Depop, stated, “This transaction is a testament to the significant growth we have delivered… We’re very grateful to Kruti and the Etsy team for their partnership.” This sentiment reflects the potential for sustained growth, even as existing players consolidate their positions in the market.

The transaction is expected to close in the second quarter of 2026, pending regulatory approvals. This timeline gives small business owners several months to assess the implications of these changes, adapt their strategies, and engage with both marketplaces as they evolve.

With eBay’s historical emphasis on C2C sales and now with the integration of Depop, small business entrepreneurs must pay attention to how this acquisition reshapes the competitive landscape of online fashion retail. Enhanced tools and services could create new opportunities, but maintaining market relevance will require adaptability and innovation.

For further details, you can read the full press release from Etsy here.

Image via Google Gemini

This article, “eBay Acquires Depop to Capture Growing Youth Fashion Marketplace” was first published on Small Business Trends