How Depop Became Gen Z’s Favorite Fashion Marketplace

Hey,

At Ecomswap, we love analyzing businesses that transformed simple ideas into industry disruptors. This week, we’re diving into Depop, the fashion resale platform that turned secondhand shopping into a social experience. By blending e-commerce with social media, Depop has built a massive community of Gen Z buyers and sellers, making resale cooler than retail.

Let’s break down how they did it 👇

🚀 How Depop Disrupted Fashion Resale

Before Depop, reselling clothes online was clunky and outdated, dominated by platforms like eBay that lacked a sense of community.

Founder Simon Beckerman asked a simple question:

Why can’t buying and selling clothes be as engaging as scrolling through Instagram?

His answer? A social-first resale marketplace where users can create personal shops, follow each other, and engage like they would on social media—while selling fashion.

💡 Lesson: Adding social elements to e-commerce can create a stronger sense of community and drive engagement.

🔍 Growth Through Community & Organic Virality

Unlike other resale platforms that focus on transactions, Depop built a social shopping experience that feels more like Instagram than eBay.

• Users follow sellers and engage with their shops.

• Influencer collaborations drive organic traffic and credibility.

• Seller spotlights & featured shops create a gamified experience.

💡 Lesson: Turning users into content creators makes them more invested in the platform and boosts organic growth.

🔥 The Commission-Based Business Model

Depop makes money by taking a 10% cut on each sale, plus payment processing fees. Additional revenue comes from:

• Promoted listings for sellers who want more visibility.

• Brand partnerships with sustainable and indie fashion labels.

• Advertising opportunities for brands targeting Gen Z.

💡 Lesson: A marketplace model with low overhead and scalable revenue streams can grow fast without inventory costs.

📈 Acquisition by Etsy & Global Expansion
 
Depop’s strategy led to rapid growth:

• Over 30 million users in 150+ countries.

• One of the most popular apps among Gen Z fashion shoppers.

• Acquired by Etsy for $1.6 billion in 2021 to expand its secondhand fashion reach.

💡 Lesson: A niche product with strong branding can attract big players looking to expand their market.

🌍 Challenges & Competition

Even with its success, Depop faces major challenges:

❌ Competition from Poshmark, Vinted, and eBay – Other platforms offer similar services with lower fees.
❌ Fraud & counterfeit items – Buyers sometimes receive fake or poor-quality products.
❌ High seller fees – Some users feel the 10% commission is too expensive.

How are they adapting? ✅ AI-powered recommendations to improve product discovery.
✅ Better authentication tools to reduce fake listings.
✅ Live shopping & influencer-led sales to drive engagement.

💡 Lesson: A great product must evolve to maintain user trust and stay competitive.

🏆 What We Can Learn from Depop

✅ Social-first shopping wins – Community-driven marketplaces create stronger engagement.
✅ Gen Z values sustainability – Resale is growing as an alternative to fast fashion.
✅ Low-friction, commission-based models scale fast – No inventory, just a platform.
✅ Branding matters – A unique, indie aesthetic can make a platform stand out.

Depop’s success proves that social commerce, sustainability, and community engagement can turn a simple idea into a billion-dollar business.

What’s your biggest takeaway from Depop’s growth? Reply and let us know—we’d love to hear your thoughts!

P.S. If you found this breakdown useful, share it with someone interested in e-commerce, fashion, or social selling! 🚀

Best regards,
Ecomswap Team