Background: eBay was founded in 1995 and became the original online marketplace for second-hand goods. It still has more than 130 million active users, but growth has slowed and its core customers skew older. Younger shoppers have been shifting to Depop, a social-driven resale platform popular with Gen Z.

What happened: So now, eBay has agreed to acquire Depop for $1.2 billion USD. eBay's investors welcomed the move, with its share price jumping up 7%.

What else: The deal gives eBay a stronger foothold with Gen Z shoppers and positions it to compete in the fast-growing sustainable fashion market.

What's the key learning

💡When big, established brands hit a growth-wall, they often choose buy growth via inorganic ways. Rather than building from scratch, companies acquire fast-growing platforms to access new users and markets quickly.

💡The sustainable fashion market is projected to more than double over the next decade and Depop has built a strong community of young, sustainability-focused shoppers. Instead of trying to replicate that connection, eBay bought it.

💡eBay aren't the only company that has acquired the next generation of users to protect long-term relevance. In 2012, Instagram was acquired by Meta Platforms for $1 billion USD after it feared losing the younger generation to the at-the-time new app. For marketplace platforms like eBay, younger users are the growth engine for the next decade.