Why 'The World Needs Etsy More Than Ever'

Etsy Inc ETSY's fourth-quarter earnings report Tuesday showed 17.8-percent growth in GMS, 23.6-percent growth in revenue and 15.6-percent growth in Marketplace revenue. The strong momentum shows that "the world needs Etsy more than ever," the company's CEO said. 

What You Need To Know

Etsy's status as an e-commerce leader was apparent early on, but the company needed to "sharpen" its focus and execution to realize its potential, Etsy CEO Josh Silverman said as a guest on CNBC's "Squawk Box" segment Wednesday. This led to the company's first-ever $1 billion GMS quarter, while the international business exceeded the $1-billion dollar mark for the full fiscal year.

Etsy's platform facilitates the sale of 50 million unique items from more than 1.9 million sellers, the executive said. While this is "incredible" for consumers, it is perhaps more important for the company to be able to better target relevant and unique products to each consumer. To this end, Etsy is still in the "early days" of "finding the right six or eight items for any given query."

Why It's Important

Etsy's revenue grew at a faster rate in Q4 than its GMS, mostly due to sellers on the platform adopting the company's Seller Services, such as promoted listings, Silverman said. The feature allows sellers to invest in their e-commerce business "in a way which makes the marketplace better and delivers revenue for Etsy," the CEO said. 

What's Next?

The majority of sellers on Etsy's platform also sell their products on other online channels, the CEO said. But for the majority of sellers who use more than one platform, Etsy continues to account for a "larger and larger share of their sales," Silverman said. 

Related Links:

Do Etsy Shares Deserve To Dip Under Threat Of Amazon Competition?

5 E-Commerce Stocks To Watch

Photo courtesy of Etsy.