Topics
Latest
AI
Amazon
Image Credits:Rafael Henrique/SOPA Images/LightRocket / Getty Images
Apps
Biotech & Health
mood
Cloud Computing
Commerce
Crypto
Enterprise
EVs
Fintech
Fundraising
Gadgets
Gaming
Government & Policy
computer hardware
Layoffs
Media & Entertainment
Meta
Microsoft
privateness
Robotics
security measure
societal
Space
inauguration
TikTok
Transportation
Venture
More from TechCrunch
Events
Startup Battlefield
StrictlyVC
newssheet
Podcasts
Videos
Partner Content
TechCrunch Brand Studio
Crunchboard
Contact Us
Junkification and fierce competition paint a tough path ahead
Remember when we wrote that Spotify ’s belated layoffsmake sensation ? Well , we feel the same about Etsy ’s proclamation that it would lay off11 % of its workforce .
This is not us being callous with employee impact by these layoffs , or make excuses for what lead the NASDAQ - listed marketplace to that point and what could perhaps have been forestall . We are just saying that this is n’t much of a surprisal .
The Exchange explores inauguration , market and money .
The company ’s fourth - quarter guidance was already a William Tell ; it has now updated it further , telling investor to gestate its “ gross merchandise sales to refuse between 1 % and 2 % during the point from the year - ago twenty-five percent and gross to increase between 2 % and 3 % , ” CNBCreported .
But more than quantitative , Etsy ’s challenge is qualitative .
Aviral tweetsummed it up in one parole : junkification ; the father and CEO of societal commercialism appTeleportDanielle Vermeer said that “ Etsy [ was n’t ] Etsy - ing anymore , ” a feeling that seems widely shared by creators and buyers alike . But she also apportion some view on the phenomenon at play .
Join us at TechCrunch Sessions: AI
Exhibit at TechCrunch Sessions: AI
Junkification , shewrote , “ is when platforms get flood with low - quality , inexpensively made intersection . ” Etsy is n’t the first political program on which this is happening , nor will it be the last . Amazon , for illustration , also seems to be flooded with unknown brands . But for Etsy , which made its name selling handmade goods , its very identity is at stakes .
Etsy’s challenges
In the company’sQ3 earnings call , CEO Josh Silverman said Etsy was “ the opposite of Temu . ” The problem is , this has n’t felt true to many in a long metre . consider how fiercely and onerously Temu and Shein seem to be willing to inhibit the marketplace , that ’s extremely touch .
Shein a light
AI is likely to make things regretful , too . Earlier this twelvemonth , The Atlanticreportedthat AI - generated detritus was “ flood Etsy , ” with “ coloring Holy Writ , stickers , mugs , and T - shirts . . . being pumped out by AI - assisted hustler . ” In the age of AGI , that might be OK , but for now , most of these are just , well , crap .
If Etsy did n’t have liberally spending competitors , or if its investors were n’t keep track of ROI , fall back its distinction edge would n’t be a trouble . But that ’s not the reality it engage in , which is what Silverman call “ a very challenging macro instruction and free-enterprise environment . ”
Which take us back to the numbers . In his livestream about the layoffs , Silverman state employees that gross merchandise sales on Etsyhad remained “ essentially flat”for two years while employee expenses had grown .
Laying people off might aid deal half of the problem , but it does n’t show how it will help the company grow again , at least in the near future .
Etsy’sstock , which had fall after the news , seems to have devolve to earlier December levels . This suggests that investors are n’t more affirmative now than they were after the company ’s Q3 earnings , and neither are we .
