Etsy, Inc. is not immune to the Chinese copycats “enjoyed” by so many Etsy Sellers. One Chinese blogger, in November 2012, asked, “What are the necessary conditions for copying Etsy?” But before the blogger asked the question, Etsy had already been copied in China. According to this article, the Chinese site Wowsai is nothing more than a Chinese copycat version of Etsy, and the Wowsai founder comes close to acknowledging it, “… founder… Zhao Jing-wen.. admits to having studied Etsy’s progress since the…. site first set up shop in 2005.” Founder Zhao Jing-wen is present on Etsy through an empty shop aptly named “hidingtree.”
It is rumored that Etsy, Inc. is in negotiations to partner with Wowsai in China. The interesting thing about this is that Wowsai recently received an “8-digit investment” from Shanda Interactive. In 2010, Shanda bought out Mochi Media, which was backed by Accel Partners. Now Accel Partners, through Etsy, will join forces with Shanda, through Wowsai. (Question: Is Accel Partners the money behind Shanda?)
What does this mean for Etsy sellers based in countries outside of China?
That is the million dollar question. It is no secret that Etsy, like many international retailers, want to get into China, the “fastest-growing consumer market in the world.” With the decline of economies around the world, many companies are looking to China for their growth. (And even though China may be a bigger investment risk, it also offers a bigger payoff.)
This quote from the April, 2013 San Jose-Mercury news article may give U.S. sellers some hope:
Though China can be tough to crack, companies with the right products can reap high rewards. A study in the fall by the Boston Consulting Group noted 60 percent of Chinese consumers said they are willing to pay more for products labeled “Made in USA” than those labeled “Made in China.”
(Oh the irony!)
More and more Etsy sellers are experiencing high volume views from China, and are writing it off to either bot-views or Chinese competitors trolling the marketplace for designs to copy. However, Rusetsy believes it is somehow related to Etsy’s intense focus on the Chinese market.
The McKinsey & Company Report
This is an interesting report giving insight into the Chinese consumer and how businesses might penetrate the Chinese market. The report is generated by McKinsey & Company (Greater China), a global management consulting firm based in the U.S. The mission of McKinsey & Company, Greater China is to “…help companies whose primary mission is to design products and services that appeal to Chinese consumers: consumer packaged goods manufacturers, retailers…”
You may recall from this Forbes’ article spotlighting Etsy, “How the Maker Movement is Reinventing Retail,” that McKinsey & Company was the sponsor of the “maker mover” discussion at the Techonomy Detroit Conference in September, attended by Chad Dickerson, and upon which the Forbes’ article was based. It is also interesting to note that Jim Breyer, Etsy investor (Accel) and Board Director, once worked as a management consultant at McKinsey & Company in New York.
Ping Li of Accel also worked for McKinsey & Company and according to the Accel website, was “responsible for the Shanda investment.” Ping Li also “continues to be active internationally by working closely with RenRen (Facebook of China) and IDG-Accel China Fund.”
Read the Writing on the Wall
Regretsy’s opinion is that Etsy, Inc.’s focus on penetrating the Chinese market is taking precedence over maintaining its foothold in the U.S. and other non-Asian countries. In other words, those Chinese resellers aren’t going annnnnny…where.