Drapers meets Depop, the social shopping platform redefining how Generation Z and millennials shop
Imagine the perfect office for a tech-savvy start-up aimed squarely at a generation welded to their smartphones and you have Depop’s Shoreditch headquarters. Casually clad twentysomethings are helping themselves to free snacks and playing with an energetic office dog when Drapers arrives at the social shopping platform’s head office one Friday morning.
Dubbed “Ebay for the Snapchat generation” by its team, Depop is part second-hand clothing marketplace, part social network. Depop’s users – the vast majority of whom are under the age of 25 – can use the app to buy or sell clothing, as well as message each other, comment on or “like” posts, and browse through and explore a feed similar to Instagram.
Scroll through Depop and you’ll see bandana tops, logo-heavy vintage T-shirts and vivid puffa jackets at affordable prices – all catnip for a certain kind of young shopper looking to stand out from the crowd.
Depop is extremely social, so you can see what your friends like or what they are selling
The app has allowed an army of young entrepreneurs to build their own fashion businesses without ever having to leave their bedrooms by selling covetable, one-of-a-kind items their peers are unlikely to find on the UK high street.
Although Depop is free to download and users can list items for sale at no charge, the app works by taking a 10% cut of each transaction. Depop will not disclose profit figures, but says it has 10 million registered users around the world and that $230m (£175m) in gross merchandise value was sold through the app last year.
“Depop is a fashion marketplace for the new generation – it’s as simple as that,” chief executive Maria Raga tells Drapers. Focused and fashionable in her distinctive blue glasses, Raga joined Depop in 2014 as vice-president of operations from her previous role as vice-president of travel at discount marketplace Groupon. She became chief executive two years later. The app was founded by entrepreneur Simon Beckerman in 2011 and he remains a member of Depop’s board.
Spanish-born Raga was a consultant by trade at Bain & Co but wanted to flex her entrepreneurial muscle. She joined Spanish etailer Privalia Group in 2009, before a move to the UK brought her to Groupon and then to Depop.
“We’re mobile first and Depop is extremely social, so you can see what your friends like or what they are selling. We focus on creativity and entrepreneurship,” she adds. “This generation is in an exploratory phase, they are trying to figure out what they want to do in life. Having that ability to connect with like-minded people and discover their own personality is very important to them.”
Depop’s senior team also includes director of finance and operations Zoe Won,g and vice-president of marketplace Rachel Swidenbank. The trio’s passion for Depop and its ability to shake up shopping is obvious.
Wong, whose role includes everything from customer support to logistics, started her career as a corporate accountant at professional services firm Deloitte. Key clients included Burberry. She moved to Tesco’s F&F as a business analyst in 2014 and joined Depop as financial controller the following year.
‘Hype beasts’ come to the app looking for a very specific items, such as a Supreme collaboration
Swidenbank oversees community development, including Depop’s top sellers’ programme, which supports particularly successful vendors with workshops, events and dedicated forums. Like Raga, she started as a consultant at Bain & Co in 2011. She headed the international team at coding education platform Codecademy from 2014 to 2015 and launched her own business, Cookoo, an online marketplace for chefs in 2015. The business closed before its second round of funding last year, after which she joined Depop.
“One of the key things that makes us different from other apps or other marketplaces is that we are really focused on our community and on fashion,” Swidenbank adds. “We celebrate individuals’ style and edge, and they come to us to be inspired by other sellers.”
Around 60% of Depop’s users are female, although the current streetwear boom has brought more male shoppers searching for that must-have piece to the app.
“We have what we call our ‘thrifty creatives’, who love to really search and browse for the right item,” Swidenbank explains. “Our ‘masterful connoisseurs’ are looking for classic vintage pieces, typically from higher-end designer brands. Then we have our ‘streetwear lovers’, which is a big segment that’s really growing fast.
“‘Hype beasts’ come to the app looking for a very specific items, such as a Supreme collaboration. ‘High street trendies’ is a smaller segment of our users: that’s someone who will buy from a high street shop and then resell, so they are recycling fast fashion.”
Investors have bet big on Depop’s potential. The app raised $20m (£15.2m) in a series B funding round at the start of this year, which was led by venture capital firm Octopus Ventures, and also included technology investment specialist TempoCap and previous Depop investor Balderton. The funding has helped Depop expand internationally.
“Depop has an exceptional team,” James Wise, partner at Balderton tells Drapers. “Maria is able to balance analytical rigour with creativity. Depop also taps into some of the broader themes we’re interested in investing in, such as people’s increasing desire to repurpose products, particularly fashion.
Depop has given a whole new generation of teenagers and young people a way to earn money
“Depop has given a whole new generation of teenagers and young people a way to earn money.”
Rebecca Hunt, early stage investor at Octopus Ventures, agrees: “Depop stood out to us as it was clear from the offset that the team had identified a unique platform. Depop is a one of a kind because it allows the power to be put back into consumers hands, leading the user to be their own entrepreneur as they build their personal brand.”
The app’s sustainable credentials have helped it draw both investors and users. Retailers have long paid lip service to sustainability, but the issue has rocketed up the agenda over the past 12 months as consumers and the government put pressure on the high street to be more transparent.
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Depop’s focus on second-hand fashion allows it to offer young shoppers products that are both unique and green, Raga argues: “We know that sustainability has been something that our community has been thinking about for a long time. They see the fashion industry as a huge generator of waste and they are incredibly conscious about the environment compared to previous generations.
“Sustainability is becoming more and more prominent and for us, it is about promoting what we do, because the majority of this business is used clothes.”
Wong agrees: “There’s a growing sentiment that is anti-big brands and anti-fast fashion, particularly among Generation Z, who are a generation of activists and want to have something to care about.”
We want to be a global business and we believe that the US is a really important stepping stone towards that
Expanding internationally into the US market has been a key focus for Depop over the past 12 months. Although the business is UK based, it also has offices in Milan, New York and Los Angeles. Depop has bolstered its team in the US from six to 12, as well as opening two bricks-and-mortar stores.
Designed to show off the best items from local shoppers, the first store opened in Los Angeles in March, followed by a New York store in August. Depop is also mulling opening a London store, although details have yet to be confirmed.
“First and foremost, the US is a massive market,” Raga explains. “We want to be a global business and we believe that the US is a really important stepping stone towards that. Many of the things that we see in the UK, such as there being a young generation that wants to be inspired by vintage, is very similar in the US.”
Wong adds: “We noticed that the app was getting a lot of traction in Los Angeles without us really having to do anything. The customer there is very interested in vintage and sustainability. We realised that Los Angeles had become our second-biggest city [after London], so we had to capitalise on that.”
As it scales up, Raga also wants to ensure Depop allows its top sellers to fulfil their full potential.
“We want to create a community-powered marketplace where the community is at the centre of everything that happens, so besides expanding into new markets, we want to enable our users to get as big as they want to be. Some of our top sellers are making six digits [through Depop] on a yearly basis and we want to be there to help them. We need to develop more tools to help them do that and support them.”
We’re in contact with the trendsetters and the tastemakers – the influencers of influencers
Although Raga admits that there will always be “people coming into our space”, she says she tries not to think too much about competitors and looks instead to businesses that inspire her, such as Instagram.
Depop faces competition from a growing number of etailers all looking to take a slice of the resale market. French resale etailer Patam launched in the UK this autumn, for example, and The Resolution store, which launched last month, pitches itself as a resale site allowing customers to buy fashionable pieces once worn by their favourite influencers.
“We will definitely hit certain challenges as we grow,” she says. “Currently we employ about 120 people globally and we will definitely hit 150 this year. It’s difficult to talk to that many people and there’s a real threshold when it becomes harder to really know the people in your business. Expanding into new markets will also be challenging, because being able to align yourself constantly with other countries is difficult – that will be hard.”
As big brands and retailers struggle to connect with younger shoppers to whom sustainability and standing out is more important than ever, Depop has an advantage in its ability to connect consumers with both each other and unique product.
Raga concludes: “I love the fact that we are working with young people. They are extremely creative and they are the ones that influence culture. We’re in contact with the trendsetters and the tastemakers – the influencers of influencers.”
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