over 2 years ago • 3 mins
Folksy ecommerce company Etsy said on Wednesday it would Depop some tags and try out a more youthful look by buying the cool kids’ favorite clothing resale platform for $1.6 billion.
What does this mean?
With sustainability high on shoppers’ lists of priorities, secondhand fashion firms are enjoying a season in the sun. The likes of ThredUp and Poshmark made hugely successful US stock market debuts earlier this year, while UK-headquartered Depop has proved particularly popular with Generation Z on both sides of the Atlantic: 90% of its 30 million active users are under 26.
Publicly listed online marketplace Etsy now appears keen for a bigger – and younger – slice of the preowned action. While its largest deal ever will leave Depop operating independently, the takeover gives Etsy access to a growing customer base across 150 countries – and one likely to spend ever more money in the years to come.
Why should I care?
For markets: Long in the leg.
The global preowned clothing market is expected to expand 20% annually for the next five years. The fact Etsy was willing to fork out 23x the value of Depop’s 2020 revenue reflects that optimism – and may also encourage investors in ThredUp and Poshmark, where shares currently change hands for only around 12x last year’s sales. Of course, Etsy may also be feeling flush: its own share price has more than doubled over the past year.
The bigger picture: Does my nose look big in this?
Ecommerce in general has done well out of a year in which many physical stores have been forced to shut. And even with restrictions now lifting across large parts of the planet, working (and shopping) from home could well be here to stay. So said teleconferencing provider Zoom this week as it reported better-than-expected quarterly results and raised its forecasts for 2021.
Keep reading for our next story...
Denmark’s Orsted wants to be the jolly green giant: the power firm on Wednesday revealed a $57 billion bid to become the world’s single largest producer of renewable energy.
What does this mean?
Orsted – formerly known as DONG Energy – is already the planet’s biggest builder of offshore sea-based wind farms. But the firm from the home of two famous Hans Christians is now looking to extend that lead while expanding its presence in other areas such as solar and onshore wind.
The increased $57 billion spending plan pledges to make Orsted the world’s largest renewable power provider by 2030 – but it’ll have to fend off some stiff competition. Spain’s Iberdrola has earmarked $183 billion to achieve the exact same ambition, while Italy’s Enel unveiled plans last year to roughly triple its renewable capacity in the same timeframe as part of a $195 billion investment plan – which could lead to it taking the low-carbon laurels instead.
Why should I care?
For markets: Blow me down.
Orsted’s share price actually fell by more than 5% following its announcement. That might be because it highlights just how crowded the renewable energy industry has become: besides specialist producers, oil and gas companies are also rapidly pivoting to green power production. The risk is that the battle for growth comes at the expense of profit, with heavy competition driving down returns for everyone involved.
The bigger picture: Green is the new black.
Despite the prospect of lower profit from renewable energy projects, don’t expect historically oil-and-gas-focused firms to hold back on their spending. The International Energy Agency says such companies still aren’t doing enough to cut emissions and limit irreversible climate change. It’s pressuring them to speed up the pace of the renewable transition and quadruple their levels of environmentally friendly investment in the coming years – or else.
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