What is Depop?
Is Depop Redefining the Fashion Industry? Depop is the fashion e-commerce and peer-to-peer social app that was founded in 2011 by entrepreneur Simon Beckerman. Depop is widely referred to as a cross between Instagram and eBay, enabling consumers to buy and sell pre-loved items. The social media feel has become particularly popular with the millennial and Gen-Z demographics and as of 2019, 90% of the platforms active users were aged 26 or under. Depop’s ‘social-first’ ethos and the environmentally-conscious values of Gen-Z consumers may well have contributed to the success of the operation, which now has over 15 million users in 147 countries.
A New Vision
A turning point for Depop in fashion e-commerce was in early 2016 when Maria Raga became the CEO of the company. Raga embraced the unique vision and mission of the brand, as a non-founder CEO. She began her role by asking Beckerman to return to the company, who had stepped down as CEO in 2013, and together the pair became a formidably collaborative team. With Beckerman’s background in fashion and design and Raga’s specializations in operations and finances, together they were able to articulate Depop’s strategic vision.
Social First
Depop has since focused on increasing its ‘social-first’ strategy and have capitalised on this approach through live events, including pop-up shops, markets, and a series of workshops in New York. Likewise, the brand’s ‘Top Sellers’ programme has promoted entrepreneurs who capitalise on their influence by selling curated items through the Depop app. Certain influential sellers can earn as much as $100,000 a year, with Depop taking a 10% transaction fee.
Depop Goes Physical
In 2018, the company launched two brick-and-mortar stores. One in Chinatown in New York City and the other in the Los Angeles Silver Lake neighbourhood. Depop’s entry into physical retail began after the brand increased sales in the United States by 137%. Beckerman said:
“It’s a place where we could give back to our creative community that reflects the vibe of the area.”
The stores allow customers to touch, visualise and experiment with garments, and specialise in vintage, unique pieces, and brands that are harder to find online. A rotating inventory is in place to amplify consumer exposure to top products.
Further Investment in Depop
In June 2019, Depop raised $62 million in a series C funding round, fronted by General Atlantic. Previous investors include Creandum, Octopus Ventures and Sebastian Siemiatkowski, founder, and CEO of Klarna. The funding is being invested in new tools to improve the functionality of the platform, including image detection algorithms. Depop is also using the investment to expand its presence in the United States. Raga said the company’s growth in America “has been almost entirely organic” up to this point. She added:
“This latest investment will enable us to scale further and faster in the US and beyond, building a platform that helps to find and grow the fashion stars and trends of the future.”
Is Fast Fashion Doomed?
Many traditional retailers are struggling in the midst of the Covid-19 pandemic, with brands such as Victoria Secret in the UK, Debenhams and Cath Kidston entering administration. The $24 billion resale market is projected to increase to $51 billion by 2023, accounting for as much as 10% of the retail industry’s sales. The movement away from fast fashion could be a reflection of how consumers are increasingly aware of the waste within the fashion industry and the need to reduce their carbon footprint.
Problematic Private Messaging
On average, Depop users collectively follow and message each other 85 million times a month. However, buyers having unprecedented access to sellers comes with some disadvantages. The company allows users aged 13 and over to join its social shopping platform, with some users reporting inappropriate and even predatory behaviour through Depop’s private messaging function.
Dominic Rose, Depop’s chief operating officer, said the company has a “zero-tolerance approach” for abusive behaviour. However, Depop, which has only 219 employees, struggles to regulate its millions of users, despite employing a specialist team to monitor complaints. Rose said the company is addressing the problem by developing a tool to enable them “to detect abuse and harassment faster”. As the brand continues to grow, Depop needs to ensure these provisions are in place to safeguard their prominently younger audience.
Fashion Redefined
Depop is not the only app targeting this market. Other peer-to-peer platforms, such as eBay, Poshmark, Vinted and ThredUp offer strong competition. Despite this rivalry, the opportunity for the resale market remains significant. With the continued success of these brands, trends towards reselling, ‘circular’ fashion, and social shopping could continue to escalate and redefine the fast-fashion world as we know it.
Post written by Holly Marshall
