That underlying strength has recently been on display with eBay and Etsy’s Q1 2025 earnings results, which showed continued strength in this difficult tariff-influenced environment. Each company discussed tariffs impact on their business model and focused on their strategic approach to provide a hedge against risk. Steve Priest, eBay’s CFO, testified local sourcing is essential to keeping them on the cutting edge of competition. In the same vein, Etsy’s chief executive, Josh Silverman, touted the benefits of American-made supplies for their sellers.
In Q1 2025 eBay reported a gross merchandise volume (GMV) of $18.8 billion. Despite the challenges, they reported a positive sign-in revenue, up more than 1% to $2.58 billion. The so-called daily active buyers on the e-commerce platform dropped 11% to 6.2 million. This drop has advocates worried about consumers’ willingness to engage as more economic uncertainty potentially heads our way.
While Etsy has shared that 90% of their sellers do not only source supplies domestically, they have a deep commitment to developing local economies. As most Etsy sellers are solo entrepreneurs working from home, this speaks to the truly distinct business model at play. The consumer-focused company does seem a bit more exposed to changing consumer spending patterns, but Silverman is back on the optimistic side with hopes to weather economic turmoil.
By leveraging extensive local sourcing strategies, both companies are able to hedge against many of the vulnerabilities some of the competitors, such as Temu and Shein, will face. These competitors were forced to raise prices in response to tariffs, showing exactly what burdens international sourcing can create.
Priest stated, “We have observed healthy volume trends due to strength in our focus categories and what could be a modest pull forward of demand from consumers worried about increased costs and complexity at U.S. customs in the near future.” This optimism is a sign that investors remain confident in eBay’s ability to pivot to whatever market conditions may arise.
Indeed, the tariff exposure for both companies still appears to be quite modest. Making sense of the Jamie Iannone would agree, our Greater China to U.S. quarter is only 5% of our TGMV. This demonstrates the company’s deep engagement in that emerging market. And China as a whole, it’s just under 10%. “Similarly, Lanny Baker noted that “At present, Etsy’s direct tariff exposure appears to be relatively low given that just over 1% of [gross merchandise sales] comes from U.S. imports of items purchased from sellers in China.”
Etsy does have a strong track record of performing well during stormy macroeconomic waters. Silverman expressed confidence in the company’s ability to adapt, stating, “Etsy has a strong track record of navigating turbulent macroeconomic conditions, and we’re confident in our ability to keep adapting.”
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