Etsy 2015 Annual Report Download - page 11

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about themselves, their businesses and the goods they sell. We also have dedicated teams and sophisticated tools to help enforce our policies. For example,
our Integrity team uses a combination of machine learning, automated systems and community-generated flags to review items and shops that may violate
our policies. Our Trust and Safety team helps to prevent and detect fraud through human review and automated tools and algorithms.
We also recognize that sometimes transactions don’t always go as planned. When that happens, our online Case System provides a way for Etsy sellers and
Etsy buyers to communicate with each other to resolve disputes.
Our Opportunities and Strengths
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We operate at the center of several converging macroeconomic trends in online and mobile commerce, employment, consumption and manufacturing. We
believe that in combination these trends will benefit Etsy sellers engaging in their creative passion, working for themselves and defining success on their own
terms; Etsy buyers accessing a diverse, global marketplace of goods that have historically been found in highly fragmented markets; and, increasingly,
values-aligned manufacturers using modern tools to craft goods in responsible partnership with Etsy sellers. We also believe that these trends create a strong,
long-term market opportunity for Etsy that will allow us to continue to expand our marketplace globally, attract buyers who want something different than a
conventional, mass-produced retail shopping experience, deepen the connections within our community and introduce new Seller Services and tools.
Most large retailers today follow a different formula from Etsy, emphasizing efficiency and scale and pressuring their suppliers to reduce their costs in order
to serve mass-produced goods at the lowest-possible prices. We believe, however, that many consumers want to purchase goods that are unique and that
reflect their personality and style, not simply mass-produced, generic goods. Finding these goods can be difficult, as markets for such goods have historically
been highly fragmented across boutiques, consignment stores and other venues and marketplaces.
Etsy sellers offer goods in dozens of online retail categories, including jewelry, stationery, clothing, home goods, craft supplies and vintage items.
Euromonitor, a consumer market research company, estimated that the global online retail market was $991 billion in 2015, up from $483 billion in 2011,
representing a compound annual growth rate, or CAGR, of 19.7%. This growth is expected to continue, with the global online retail market becoming a
significantly larger portion of the total retail market, reaching $1.8 trillion by 2019, implying a 15.5% CAGR from 2015. (Source: Euromonitor - 2016 Passport
Retailing.)
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We believe we can benefit from these positive trends by continuing to leverage and expand our platform. Our platform is one of the largest online
marketplaces in the world and we have achieved our scale because of the following key strengths:
 We have built a trusted marketplace that embodies our values-based culture, emphasizing respect, direct communication and fun.
Our reputation depends upon our Etsy sellers, their unique offerings and their adherence to our policies. We establish trust in our marketplace in a variety of
ways. For example, our policies are designed to encourage transparency and clearly outline the rights and responsibilities of Etsy sellers, Etsy buyers,
wholesale partners and manufacturing partners participating on our platform.
Transparency is one of our core values and Etsy's transparency with our community helps to support the trustworthiness of our marketplace. For example, we
publish an annual Progress Report that details our progress toward our ideals and shares our hopes for the years to come. In 2015, we also released a
Transparency Report, which, among other things, describes the steps we take when items that do not meet our guidelines are listed on our platform, or when
listed items are alleged to infringe third party rights.
We also establish trust by emphasizing the person behind every transaction. We deepen connections between Etsy sellers and Etsy buyers through our direct
communication tools, seller stories on our website and apps and in-person events, highlighting personal relationships as a key part of the Etsy experience. For
example, Etsy sellers are encouraged to share their stories and use new tools, such as shop videos, to reach Etsy buyers on our platform and on social media.
The trustworthiness of our marketplace and the connections among people in our community are the cornerstones of our business.
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