The online retailer eBay has agreed to buy the British secondhand fashion resale app Depop from Etsy for about $1.2bn (£890m) in cash, as eBay targets younger fashion-loving consumers.

The deal comes at a time when secondhand marketplaces continue to soar in popularity, especially among gen Z shoppers – born between 1997 and 2012 – amid a squeeze on household incomes and concerns about sustainability in fashion.

However, the sale to eBay marks a $400m loss for Etsy, an online market that focuses on craft and handmade items, which bought Depop for $1.6bn less than five years ago.

Depop, which is based in London, is expected to keep its name, brand, platform and culture, according to the companies.

The acquisition of Depop is intended to help eBay by “deepening its reach with younger fashion-forward consumers and expanding its presence in one of the most dynamic areas of resale”, the companies said in a statement.

The eBay chief executive, Jamie Iannone, said Depop would complement the company’s existing platform and enable it to “reach a younger demographic across the expanding recommerce landscape”.

Depop had 7 million active buyers by the end of last year – almost 90% of whom are under the age of 34 – and more than 3 million active sellers. It recorded annual gross merchandise sales of about $1bn in 2025 and has been growing rapidly in the US, registering almost 60% year-on-year growth there last year.

Peter Semple, Depop’s chief executive, said the deal was “testament to the significant growth we have delivered as we have evolved our product experience”.

However, eBay has been struggling in recent times to keep pace with its fast-growing rivals Vinted and Depop, which tend to appeal to younger consumers. It scrapped fees for UK private sellers of preowned clothing and most other items in 2024 amid growing competition from other platforms, which mostly charge buyers rather than sellers.

Its purchase of Depop comes after the trade journal Retail Week reported that Vinted had become the third-largest fashion retailer in the UK, after Primark and Next.

Etsy’s 2021 purchase of Depop came at a time when it was looking to attract younger consumers and was trying to build a “House of Brands” to fend off competition from other marketplaces, such as Amazon.

Selling Depop will allow Etsy to “grow the Etsy marketplace in ways that matter most to our buyers and sellers”, according to the company’s chief executive, Kruti Patel Goyal.

The deal has been unanimously approved by the boards of eBay and Etsy and is expected to be completed in the second quarter of the year, provided certain conditions are fulfilled and it receives regulatory approval.

Shares in eBay rose by 7% on the news, while shares in Etsy soared by more than 15% in after-hours trading following the announcement.