Silicon Allee

DaWanda, Germany's Etsy, to shut down operations

dawanda claudia helming
Claudia Helming. Source: DPA.

When rumors of its demise started circulating in the startup scene last week, DaWanda was quick to confirm: The Berlin-based e-commerce company is indeed closing up shop.

As a marketplace for small traders to sell handmade products, DaWanda was built in the image of Etsy about 12 years ago, before the American giant had entered the European market. The German company was the closest thing Etsy had to a competitor. But the race wasn’t even close. Etsy’s total revenue for 2017 was $441 million (from $3.25 billion in gross merchandise sales). DaWanda’s revenue was €16.4 million, an increase of 21.4 percent from the year before. But Etsy reported operating profit of $80 million last year, while DaWanda had an operating loss of about €1 million.

DaWanda said sales will end as of August 30, though sellers will still be able to access their information for a few more months. After the end of 2018, the website will redirect users to Etsy. DaWanda said its sellers will soon have the ability to port over their existing stores to Etsy, which has a regional office in Berlin.

DaWanda was trying to be a home-grown alternative to Etsy, which has drawn criticism in the last few years (including from me) for shifting away from its homemade roots to allow mass manufacturing. Co-founder Claudia Helming told Süddeutsche Zeitung international sales weren’t growing strongly enough to compete with Etsy. She said she will assist with the transition to her erstwhile competitor for a while as DaWanda shuts down.

etsy vs dawanda

Etsy, notably, is not acquiring any of the company’s intellectual property or 150 employees. In a release, it spun the referral agreement as a way bolster its position in Central Europe; it plans to offer expanded payment processing options and translate its entire website into Polish.

Some makers who sold their wares on DaWanda were already also on Etsy. The number of sellers on DaWanda had been dwindling: The press release from Etsy said DaWanda has 70,000 active sellers; in 2013, that number was reported at 170,000. Etsy already has 25,000 sellers from Germany among its members, and an Etsy spokesperson told Süddeutsche its growth in the German market in the first quarter this year was double the country average.

DIY e-commerce on the rise

DaWanda-devoted sellers in central Europe were dismayed at the news, and complained that they found out via shared articles on Facebook with only eight weeks’ notice. The company had planned to make the announcement today, but had to move up the timeline when startup blogs published the news Friday. A spokesperson said the closing “was a joint decision of DaWanda’s executive team and its shareholders.”

Things hadn’t been going so swimmingly for DaWanda lately. Last year they laid off 60 workers, about a quarter of their staff. (Etsy also laid off 15 percent of its employees last summer.) Co-founder Michael Pütz left the Berlin firm in 2016, and CEO Niels Nüssler departed for e-commerce startup Monoqi earlier this year.

Handmade marketplaces were a godsend for small traders in the mid-2000s, when it was still quite difficult to start a small e-commerce store. But the rise of DIY e-commerce options like Shopify and BigCartel, meant Etsy and DaWanda increasingly had to justify their existence in the wider e-commerce ecosystem. DaWanda wasn’t able to.

 Grace Dobush is an editor with Handelsblatt Global in Berlin. To contact the author: grace.dobush@gmail.com

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