Niche Wars: Amazon Launches Challenge to Etsy Artisanal Jewelry

Market Analysis
08/10/2015 21:49

Timing its launch to perfection, Amazon today introduced Handmade at Amazon just prior to Etsy's planned launch of Etsy Manufacturing, which will connect merchants with pre-approved manufacturers in the US and Canada, emphasizing smaller companies that treat workers fairly. Undermining Etsy's calling card, the move is calculated to challenge Etsy's success in the highly popular artisanal jewelry segment (currently, 7.5 million jewelry items are listed on its site), just as Etsy is preparing to allow sellers to use outside manufacturers, which angers some of the smaller vendors of handmade items who helped make it successful. 

Since its April initial public offering, which valued the company at $4 billion, Etsy's shares have fallen by more than 50%, and the company's losses doubled in the most recent quarter. Sensing vulnerability, Amazon - according to the New York Post tabloid - is engaging in hand-to-hand combat with Etsy, with Handmade poised to be the "Etsy-killer". JCK's Rob Bates notes that, "Handmade at Amazon has a ways to go before it catches up to Etsy." Handmade at Amazon currently lists only 47,000 jewelry items. Reuters notes that Etsy is trying to stop merchants from defecting to giant rival Amazon.