In the Era of Mass Consumption, Artisans Flourish
Etsy, Faire, and Amazon Handmade bring local crafts to the world
2020 has been a difficult year for local shops, with forced shutdowns and a drastically-declined tourism and travel industry. But the past few weeks have brought some encouraging news for the industry.
Technology and policy
A series of both technological advancements and changing foreign relations has impacted both how and from where American consumers purchase everyday goods. In the past 50 years, the phrase “made in China” has become an evidence of the shift from domestic to foreign production.
In 1979, the United States and China signed a bilateral-trade pact that allowed a rapid increase in the amount of goods transferred between the two countries. ($2 billion of total merchandise transferred in 1979 to $636 billion in 2017, per the Congressional Research Service.) And in late 2001, China became a member of the World Trade Organization, which further boosted its manufacturing base and allowed American consumers to get products from China at a much lower cost.
The advent of Alibaba — the Chinese internet company founded in 1999 — allowed companies and brands in the U.S. to get into direct contact with contract manufacturers in China and beyond. Made-in-China.com and DHgate.com offer similar services. These factors made finding products less expensive and more efficient, both legally and logistically.
The local comeback
Even as mass-produced goods become more ubiquitous, the internet-startup boom fought for individuals making goods by hand. Etsy (ETSY) — started in 2004 in Brooklyn — has performed well both since its IPO in 2015 and since the beginning of the pandemic. It’s stock price is now more than triple what it was at the end of March.
Last Wednesday, the company reported that revenue had more than doubled from what it was in the quarter a year ago and net income rose to $91.8 million, up from $14.8 million in the year-ago timeframe.
A startup similar to Etsy (but directed towards retailers rather than individuals) called Faire raised $150 million at a $1 billion valuation last week.
The Faire platform helps local stores gain access to growing brands at wholesale prices. Rather than reaching out to individual makers, shop owners can browse a plethora of categories on Faire and order directly on the site. The company is now achieving $1 million in sales per day and expanding into new markets.
Startups aren’t the only winners in the crafts sector. The largest e-commerce company, Amazon, launched Amazon Handmade in 2015 to compete with Etsy. While Handmade certainly gets sellers in front of more shoppers, there have been reports of Amazon hanging its Handmade producers “Out to Dry.”
COVID-19 has potentially realigned consumer consciousness towards more local shopping and less purchases from big-box retailers. One thing’s for sure: there are many tools for artisans to get their goods out across the country and world, and to compete with e-commerce giants achieving massive savings through economies of sales.
