137% GROWTH

This LITTLE KNOWN #Ecommerce player grew by 137% in Q2 ’20

It is SMALLER than $SHOP $SE $MELI $AMZN with its market cap of $ 14B

Net Income of $ 96.4m on sales of $ 428m GROWTH and NET INCOME are NOT INCOMPATIBLE

Here is a SHORT thread

$ETSY is an e-Commerce platform where buyers mostly sell handmade or vintage products and crafts

It was launched in 2005 and started trading in 2015

Back in 2015, it had sales of $ 58m and booked an average loss of $ 7m per Q.

FAST FORWARD TO Q2 ’20

Revenue grew to $ 428m for a 137% YoY growth coming from $ 181m

Average growth pre-COVID stood at around 35% YoY

GMs of 74% (up from 66% hist.) and OMs of 28% (up from 10% hist.)

$ETSY is sitting on a war chest of $ 1B in cash with $ 1.2B in Current Assets vs. $ 279m in Current Liab.

It generated an Operating CF of $ 220m this Q ($ 50m / Q hist.)

YES BUT that is NOT SUSTAINABLE because they just sold tons of MASKS

Well, I see you coming You’d say that $ETSY was the prime supplier of handmade & fancy masks during the pandemic

Let’s cut the chatter and see what the numbers tell

Non-mask sales are up 93% YoY and Gross Merchandise Sales (GMS) for the following categories are surging

Homeware & furnishings GMS grew 128% YoY

Jewellery & accessories GMS grew 50% YoY

Craft supplies GMS grew 138% YoY

Beauty & Personal Care GMS grew 187% YoY

$ETSY is thus an #eCommerce platform Not a mere retailer of COVID masks

“Locally produced” “Vegan” “Organic” “Reused materials” you know what all of these have in common?

They are booming and $ETSY is providing the platform this market needs

Here are some figures on the world going vegan and organic

There were 20m vegans in the U.S. in 2017, up from 4m in 2914

11k+ vegan food and drink businesses were launched in the EU in 2019, up 93% from 2016

In SEA vegan product launches increased by 440%

Still not convinced? Just look for “Vegan” on Google Trends

COVID gave $ETSY a huge bump forward as many new customers flocked in

The numbers of loyal customers increased by around 55%

A considerably larger customer base making repeat purchases sounds like big cash

As $PINS is growing, $ETSY is “Pinterestifying” itself - enabling users to save and favourite items

$ETSY is now enabling sellers to upload videos in order to showcase their product with already 700k videos uploaded

Key Risks

Q2 ’20 was a very strong quarter for $ETSY, as lockdowns go away, buyers might buy their crafts and vintage goods in brick and mortar shops again

The possibility to buy directly from Instagram $FB and $PINS might be a real threat to $ETSY

The Crunchy Part

Stats show, we are just at the beginning of the handmade, local, recycled and vegan trends

Despite fierce competition from larger players, $ETSY still managed to grow its revenues 137% YoY while keeping COSTS CONTROLLED

With a 93% growth YoY without mask revenue, $ETSY has proven they are real #ecommerce players such as $AMZN $SHOP $MELI

Investing in $ETSY today is a way to enter a company with solid financials that is ideally placed in the key trends that will shape the 2020s

For now, we’re entering $ETSY with a medium stake

$MELI is on our watchlist To Be Reviewed SOON

Please note that this is not a recommendation to buy - You are responsible for conducting your own research

Hope you liked this thread!

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Here is a review for $ETSY - would love to hear your take the matter
@LiviamCapital
@anandchokkavelu
@willschoebs

Disclaimer - This is not investment advice in any form and investors are responsible for conducting their own research before investing.

Sources

✑ Investor presentation

✑ Company website

✑ Nielsen

✑ TheVeganSociety

✑ TheBeet

✑ TechNavio