Etsy’s stock has rebounded slightly after a scare earlier today that sent the stock down five percent. The stock closed out at $13.57, down over four percent.
Overnight Amazon announced a new competing marketplace called Handmade at Amazon. When the stock market opened it was clear investors were worried about Handmade’s potential effect on Etsy. To dispel fears, Etsy CEO Chad Dickerson released the following statement:
“We believe we are the best platform for creative entrepreneurs, empowering them to succeed on their own terms. Etsy has a decade of experience understanding the needs of artists and sellers and supporting them in ways that no other marketplace can. Our platform attracts 21+ million thoughtful consumers seeking to discover unique goods, and build relationships with the people who make and sell them.”
Etsy is confident that ultimately its community of merchants and creators will stay true to its platform, but Amazon has a habit of disrupting other businesses with cut-rate deals. While Amazon isn’t always successful in wiping out the competition, it is consistently cut-throat in dealing with competitors.
In addition to Amazon, the ecommerce market is diversifying quickly. There are a number of small marketplaces like Hatch, Kaufmann Mercantile, and TicTail that are developing their own reputations as shops where consumers can find unique handmade goods. These startups, though not big threats, do nibble away at some of Etsy’s business. Add in Amazon, and Etsy may have a big problem.
Investor confidence in the startup hasn’t been especially high since Etsy went public in April. In the six months following, the company’s stock price has more than halved.
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