Amazon expands its Etsy competitor to Europe

Handmade will now be available to customers in Germany, France, Italy, Spain, and the United Kingdom

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Etsy is going to have its work cut out for awhile.

Amazon Handmade, the Etsy-like marketplace that allows anyone to sell their handcrafted items online, has expanded to at least five additional regions in Europe, including Germany, France, Italy, Spain, and the United Kingdom.

Handmade originally launched in the U.S. last October and has since grown fivefold to include more than 500,000 items offered from sellers across all 50 states and over 80 countries worldwide. For comparison, Etsy says it offers 40 million items for sale from 1.7 million active sellers. The company says it has 26.1 million active buyers and saw $2.4 billion in gross merchandise sales last year.

Furthermore, Amazon’s announcement says customers in Europe will only be able to shop 30,000 items, meaning they won’t yet have access to the marketplace’s full inventory.

So it’s clear that, having started over a decade ago, Etsy has a big headstart on Amazon. But, as the far larger company, Amazon has the advantage of playing the long game: Etsy has a market cap of $1.8 billion, while Amazon's is now $385.6 billion. Not only that, but Amazon can leverage the ubiquity of its standard marketplace to funnel users and generate interest in Handmade.

“With our focus on genuine handcrafted products, the Handmade at Amazon store has been a big hit with artisans and customers in the U.S. and we’re encouraged by the strong growth of sales and customer traffic,” said Steve Johnson, Director at Amazon, in a prepared statement. “Amazon has become a one-stop shop for holiday gifting, and this year customers will see hundreds of thousands more handmade items, with thousands eligible for Prime two-day shipping.”

Earlier this week, Etsy announced that it had acquired Blackbird Technologies, a company that uses machine learning technology to improve search results and recommendations. Terms of the deal were not disclosed, but the entire Blackbird employee base will be joining Etsy. The company itself will be shutting down, with its various technologies folding into Etsy.

Shares in Etsy remained largely unchanged after the news was announced, though the price has increased somewhat to $14.60 after Monness Crespi & Hardt increased its rating to "Buy." Overall, Etsy is up 7.5 percent for the week and up 77.4 percent year-to-date.

It will be interesting to note whether Amazon’s expansion into Europe will have any effect on the rivalry with Etsy. So far, Etsy has downplayed the competition and has cast itself as firmly remaining the market leader. International is a major part of the company's strategy, however, with people buying and selling from "nearly every country in the world." Additionally, Etsy has several offices in Europe, including Germany, Ireland, France, and the United Kingdom.

Ed. note: Our 6th Annual Vator Splash LA conference is coming up on October 13 at the Loews Hotel in Santa Monica. Speakers include Mark Cuban (one of the hosts of Shark Tank and owner of the Dallas Mavericks); Brian Lee (Founder & CEO, Honest Company); Leura Fine (Founder & CEO, Laurel & Wolf ); Nick Green (Co-Founder and Co-CEO, Thrive Market); Tri Tran (CEO & Co-founder, Munchery); Adam Goldenberg (Founder & CEO, JustFab); Andre Haddad (CEO, Turo); Mike Jones (Founder, Science) and many more. Join us! REGISTER HERE.