Why is eBay buying secondhand fashion platform Depop?

Online marketplace eBay recently announced it will acquire Depop, a second-hand clothing platform, for $1.2 billion. The news comes just five years after Etsy bought Depop for $1.6 billion. 

If you haven’t heard of Depop, it’s likely you — like this reporter — are over 35 years old.

“Something like 90% of their consumer base [is] under age 34. EBay’s the opposite; they're mostly 35-plus,” said Steve Hochman, managing director at technology solutions firm Nagarro.

He said that’s likely a big part of why eBay wanted to buy Depop: “Depop is a really cool, hip brand. It's kind of like acquiring your cool cousin.”

There are risks for eBay. Hochman said Depop, like other sites that let people buy and sell used clothes, has struggled to make money. But eBay may be well-positioned to solve some of its problems.

“EBay has immense systems, sophistication, scalability, and they've got armies of experienced designers creating a great shopping experience,” he said. All of which could translate to Depop.

Even without profitability, Depop brings something valuable to eBay, said Forrester retail analyst Sucharita Kodali: its database of Gen Z buyers and sellers.

“That's a huge benefit just out of the gate, because it would take them maybe more than a billion dollars, arguably, to get that many names of Gen Z consumers on their own,” she said.

And by buying the platform, Kodali said, they get the names and data on what those consumers want.