Good day, ladies and gentlemen, and welcome to the Etsy, Inc. First Quarter 2015 Financial Results Conference Call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. If anyone should require operator assistance, please press star then zero on your touch-tone telephone. As a reminder, today's conference call is being recorded. I would now like to turn the conference over to Jennifer Beugelmans, Vice President of Investor Relations at Etsy. Please go ahead.
Thank you. Good afternoon, and welcome to Etsy's first quarter earnings conference call. Joining me today are Chad Dickerson, CEO, and Kristina Salen, CFO. Before we get started, just a reminder that our remarks today include forward-looking statements relating to our financial performance and results of operations, business strategy, outlook, mission, and potential future growth. Our actual results may be materially different. Forward-looking statements involve risks and uncertainties, which are described in our press release and in our final prospectus filed with the SEC on April 16, 2015. Any forward-looking statements that we make on this call are based on our beliefs and assumptions today, and we don't have any obligation to update them. Also during the call, we'll present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in today's earnings press release, which you can find on our investor relations website.
A link to the replay of this call will also be available there. With that, I'll turn the call over to Chad. Chad?
Thanks, Jennifer. Thanks to everyone joining us today for our first ever financial results conference call. Before I jump into our first quarter performance, I want to once again thank our team here at Etsy and our sellers around the world who worked so hard to make our IPO a truly profound moment for our company and our community. We've received such positive feedback. We're truly grateful for the support. During the first quarter of 2015, Etsy's GMS was nearly $532 million. Etsy's revenue growth was nearly 45% year-over-year. We saw our number of active sellers increase approximately 26% to 1.4 million. Our number of active buyers increase nearly 37% to 20.8 million. We continued to expand our mobile presence. We believe that our first quarter results demonstrate that our mission is working.
Etsy continues to make progress reimagining commerce to build a more fulfilling and lasting world, connecting creative entrepreneurs with thoughtful consumers and expanding the Etsy economy. As we shared before, we believe we can further our mission by focusing on four areas: making Etsy an everyday experience, building local marketplaces globally, offering high impact seller services, and expanding the Etsy economy. Before I turn the call over to Kristina to discuss our financial results, let me give you an update on the progress we've made recently in these four areas. First up is our focus on making Etsy an everyday experience. This is all about mobile. We're leveraging our already strong mobile presence to increase engagement with Etsy buyers and enhance the Etsy seller experience.
As of March 31st, our mobile apps have been downloaded 25 million times. We think our beautiful, engaging mobile apps are one of the reasons Etsy narrowed the gap between mobile visits and mobile GMS during the first quarter. To keep mobile shoppers engaged and increase the number of items viewed in the Etsy app, we added some exciting new features recently. Here are just a few of many I'd like to highlight. In April, Etsy launched a photo-sharing feature in the buyer app. This new feature allows mobile buyers to include a photo of their purchase while they're posting a five-star review on the app and makes it easier for members to share photo-inspired reviews of their Etsy purchases with their friends and family across social networks or privately via email or text.
Given that 92% of our buyers come to Etsy because our sellers offer items they can't find anywhere else, we believe these visual endorsements may increase buyer engagement and influence purchase decisions by creating a more authentic, people-first shopping experience. During the first quarter, in the month of April, we made great progress in making it easier for buyers to sign in and check out when Etsy launched mobile payment options for Apple Pay and Google Wallet and social sign-in through Facebook and Google. We have early indications that these enhancements are gaining traction with our community. For example, since launch, nearly 19% of our new member registrations on our iOS buyer app have come through Facebook, and approximately 37% on the Android buyer app have come through Google sign-in.
Likewise, on average, more than 20% of our existing members are using Facebook to sign in to our iOS buyer app, and more than 23% are using Google to sign in to the Android buyer app. As you may have seen, Etsy also just rolled out our Apple Watch app. It's beautifully designed with extensive functionality, and like our Facebook and Google apps, also enhances our relationships with our partners. We launched this app in conjunction with an Apple promotion, which led to a meaningful increase in downloads on iOS. Turning now to building local marketplaces globally. This is about building on Etsy's global foundation by developing local markets in key countries outside the U.S., where there are early signs of both local buyer and seller activity. Over time, we think our global local strategy will drive international GMS to 50% of our total GMS.
During the first quarter, Etsy's international GMS was approximately 30% of our total GMS, about flat with last year. We think this is due largely to the strength of the US dollar, which Kristina will talk more about. Putting aside the currency impact for now, there are lots of exciting international efforts that I'd like to highlight. For buyers in the U.K. in the first quarter of 2015, growth in purchases from U.K. sellers was seven times higher than growth in purchases from U.S. sellers. This means that the local community is truly connecting in the U.K. In Canada, we hosted our Canada Team Captain Summit. 33 team captains came together for a weekend to discuss what they need from Etsy. Etsy provided support on leadership, selling on Etsy, and organizing an upcoming one-day event of pop-up Etsy markets around the country on the same day.
In Australia, Etsy ran a campaign to attract and help onboard new sellers. Through this campaign, we partnered with a local advocate of independent creative businesses and a seasoned local Etsy seller to offer new sellers support to launch their Etsy businesses. The program attracted 3,000 participants. In France, following our acquisition of ALM, the ALM team has continued to build the platform, and they're hard at work taking the success ALM has achieved on desktop to mobile with the recent launch of a V2 iPhone ALM app and additional new upcoming mobile apps and enhancements to the mobile web design. Let's turn now to high-impact seller services. As we talked about in our IPO roadshow, seller services let Etsy sellers spend more time making, designing or curating the work they enjoy most, and less time on the business task of running their shops.
As we've described before, there are three seller services that generate revenue for Etsy, Promoted Listings, Direct Checkout, and Shipping Labels. Over time, Etsy strives to increase usage of these three seller services, expand their geographic reach, and launch new ones. During the first quarter, seller services represented approximately 47% of total revenue. Recently, we've made several enhancements to the seller experience that I'm excited about. In April, Etsy launched calculated shipping for sellers in the United States. This new feature automates the most time-consuming aspects of determining shipping costs for our sellers. Etsy has already seen 16,000 shops, or 1% of our active sellers, sign up for this feature, and that listings using calculated shipping see a 20% increase in international availability. In March, Etsy launched a new listings manager that makes it easier and faster to list items and help sellers with inventory management.
One of its most notable characteristics is that it allows for auto-renew, so sellers don't have to manually renew a listing when it expires in four months. Finally, also in April, Etsy released a redesigned seller handbook. It now includes better segmented content, better discovery and search functionality, and personalization that is based on seller needs. Our educational content is now integrated with FAQ and help content, is translated into all of our supported languages, and is mobile friendly. Finally, expanding the Etsy economy, which is all about bringing new members into the Etsy community beyond our current Etsy active sellers and buyers. Etsy has made great progress in wholesale and small batch manufacturing. I'm really excited about Etsy's wholesale partnership with Whole Foods that we launched in April. Through this program, products from Etsy wholesale sellers are currently being featured in New York area Whole Foods stores.
These products are sold in the Whole Body section of the store on an Etsy and Whole Foods branded display that showcases each maker's unique story. Our strategy to expand the Etsy economy also includes our responsible manufacturing program. As of March 31st, 2015, more than 3,900 sellers have been approved for outside manufacturing, resulting in more than 6,600 partnerships, and 85% of those relationships are between sellers and manufacturers in the same country. We're continuing to collaborate with thought leaders, including small-scale manufacturers, policy makers, Etsy sellers, and others, to envision new models of responsible manufacturing. Our four key areas of focus that we've talked about before and have outlined here again today are all about building a successful business for the long term. In another month, Etsy will celebrate its 10th anniversary, and we're excited to enter our second decade of reimagining commerce.
This is a large market opportunity at the convergence of macro trends in employment, commerce, consumption, and manufacturing. Etsy is well positioned. Etsy sellers operate in dozens of retail categories. We built a thriving platform business with our seller services, and we're connecting previously fragmented networks into the Etsy economy, like offline retailers and responsible manufacturers, in ways that they've never been connected before. We're excited about the long-term market opportunity for Etsy and our progress to date. We remain focused on creating long-term results for our entire community, including our shareholders. We appreciate the opportunity today to report our progress and look forward to speaking with you in the quarters, years, and decades to come. With that, I'll hand it over to Kristina to go over our financial results in more detail.
Thanks, Chad, hello to everyone joining us today. Just a note, unless I say so, all comparisons I'll be referencing here are on a year-over-year basis. Let's start with GMS. During the first quarter of 2015, the Etsy marketplace generated $531.9 million in growth merchandise sales, up 28.2%. Growth in GMS was driven by 25.8% growth in active sellers and 36.5% growth in active buyers. At the end of the first quarter, Etsy had 1.4 million active sellers, up from 1.1 million last year and 1.35 million in the fourth quarter of 2014. As a reminder, an active seller is one who has incurred at least one charge from us in the past 12 months. Charges include transaction, listing, and seller services fees.
Etsy had 20.8 million active buyers at the end of the first quarter, up from 15.3 million last year and 19.8 million in the fourth quarter of 2014. As a reminder, active buyers are those who have made at least one purchase in the last 12 months. Etsy's first quarter results demonstrated our continued progress in narrowing the gap between mobile visits and mobile GMS, and highlighted the results of continued improvements in our mobile app offerings. 57.7% of our visits came to us from a mobile device. This continued to outpace the rate of growth on desktop and was up 760 basis points year-on-year, and 270 basis points quarter-on-quarter.
41.4% of our GMS came from a mobile device, up 620 basis points year-on-year, and 440 basis points quarter-on-quarter. Within Etsy's international business, we're seeing continued significant growth, with international revenue growing 65.3% in the first quarter. However, international GMS as a percentage of total GMS was 30.5%, flat year-on-year. We believe that foreign exchange has dampened Etsy's buyer activity outside of the U.S., and it has lowered demand for U.S. dollar-denominated goods. This impacts both overall Etsy GMS growth rates and the percent of GMS that comes from international. For example, growth in GMS from U.S. sellers to international buyers was largely flat in the first quarter and decelerated 22 percentage points from the fourth quarter of 2014.
This is in contrast to what we saw in the first quarter of 2014, when the growth rate of GMS from U.S. sellers to international buyers accelerated quarter-over-quarter. Turning to revenue. During the first quarter, total revenue was $58.5 million, up 44.4%, driven by growth in marketplace and Seller services revenue. Marketplace revenue grew 27.1%, primarily due to growth in transaction fee revenue and, to a lesser extent, the growth of listing fee revenue. Seller services revenue continues to grow faster than GMS, up 72.3%. This growth was primarily due to growth in revenue from Promoted Listings, which continued to benefit from the relaunch of the product late in the third quarter of 2014. Shipping Labels revenue growth was driven by a combination of increased adoption and enhancements to the product.
Direct Checkout revenue growth was driven by increased adoption. Gross profit for the first quarter was $37.8 million, up 50.5%, and the gross margin was 64.6%, up 260 basis points. In the first quarter, gross profit grew faster than revenue. This was because of the leverage we achieved in the cost of revenue for employee-related and hosting and bandwidth costs. This was also because of growth of Promoted Listings, which is a higher margin revenue stream, and it outpaced the growth of Direct Checkout, which is a lower margin revenue stream. Turning now to operating expenses. Etsy's total first quarter operating expenses were $42.7 million, up 72.6%. Marketing expenses totaled $12.2 million, up 63.5%, representing 21% of total revenue versus 18% last year.
The increase in Marketing expenses was driven primarily by increased spending on Product Listing Ads and on higher employee-related expenses. Product development expenses totaled $10 million, up 24.5%, representing 17% of total revenue versus 20% last year. The increase in Product development expenses was driven by higher employee-related expenses. G&A expenses totaled $20.5 million, up 122%, representing 35% of total revenue versus 23% last year. The increase in G&A expenses primarily resulted from an increase in employee-related expenses, including incentive-based compensation related to Etsy's second quarter acquisition of ALM and Etsy's $3.2 million stock contribution to etsy.org in January of 2015. Finally, headcount at the end of the quarter was 717 compared with 685 as of December 31st, 2014.
Non-GAAP adjusted EBITDA was $6.7 million, up 9.3%. This resulted in an adjusted EBITDA margin of 11.4%, down 370 basis points. The adjusted EBITDA margin was impacted by the increases in marketing and employee-related expenses that I talked about earlier. First quarter 2015 net loss was $36.6 million, compared with a net loss of $463,000 last year. Etsy's net loss increased as a result of non-cash, non-operating expenses related to the revised corporate structure that we implemented on January 1st, 2015. The updated corporate structure was implemented to more closely align with our global operations and our future expansion plans outside the U.S. There were two non-cash, non-operating expenditures related to this revised corporate structure.
The first was a non-cash ten and a half million dollars increase to Etsy's tax provision, which brought Etsy's total tax provision to $10.7 million. The second was a non-cash currency exchange loss of $20.9 million, largely due to an intracompany debt incurred related to the corporate structure. During the quarter, we generated approximately $8.9 million in cash from operations, compared with $6.2 million in the first quarter of 2014. Following the successful completion of our initial public offering, as of April 30th, 2015, we had cash and marketable securities totaling $293.5 million. To close, I'd like to highlight a few factors we should consider when thinking about Etsy's second quarter of 2015. Although we won't be providing quantitative guidance, we will from time to time highlight qualitative factors to keep in mind that could impact a specific quarter.
For the second quarter of 2015, I'd like to highlight four items. First, if the current exchange rates are maintained through the second quarter, then we think it will continue to impact buyer behavior outside of the U.S. and therefore Etsy GMS growth. Second, we expect to increase the pace of hiring in the second quarter compared with both the first quarter of 2015 and the second quarter of 2014, and we expect second quarter hires to be a larger percentage of total 2015 hires than they were in the second quarter of 2014. Third, in the second quarter, we plan to spend more in absolute dollars on marketing compared with both the second quarter of 2014 and the first quarter of 2015. Etsy's digital marketing spend will continue to be focused on search engine marketing, particularly PLAs.
Etsy will continue to ramp email marketing efforts and our affiliate marketing, the latter of which was launched in the first quarter of 2015. We also expect to begin our first-ever mobile app ad campaign in the second quarter of 2015. Fourth, I'd like to remind everyone that the second quarter of 2015 will include the impact of Etsy's $300,000 cash contribution to etsy.org as an operating expense, as well as approximately $300,000 in one-time IPO-related expenses, mostly due to our listing day seller market, which cannot be deducted from our IPO proceeds. With that, I'll thank you for listening, and I'll turn the call back to our operator, Candice, to open it up for questions.
Thank you. Ladies and gentlemen on the phone lines, if you would like to ask a question at this time, please press star followed by the 1 key on your touch-tone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. In order to allow time for all questions, we ask that you please limit yourself to 1 question. If you have additional questions, you may reenter the queue. Our 1st question comes from Heath Terry of Goldman Sachs. Your line is now open.
Great. Thanks. I guess a couple of things. Kristina, if you could update us on sort of what you're seeing in terms of the ROI Etsy's able to achieve on this increased marketing spend. Has it held up the way that you had expected it to? On the decision to invest in app marketing, when you say you're going to start your 1st app campaign, is that largely going to be an online campaign as well, or do you see branching out into other channels the way we've seen some other app providers do over the last few years?
Sure, Heath. Your 1st question was on our marketing ROI. As we've said previously, our intention is to keep our marketing ROI positive at an aggregate level, at a company level, and we continue to stick to that in the 1st quarter and in the 2nd quarter as well. To answer your 2nd question, with regard to mobile app, the 1st thing that I would say is that we're talking about a relatively smaller $ growth in expenditure in this line item. It's the 1st time we've ever done it, so we want to see what happens. It will be on mobile because it is about downloading mobile apps. We don't have any plans to go offline with our mobile app download activity.
Great. Thank you.
You're welcome.
Thank you. Our next question comes from Brian Nowak of Morgan Stanley. Your line is now open.
Thanks. I have two questions. First one, just go back to the marketing spend. Can you just help us better understand, how many countries are you spending on and advertising now, and can you kind of talk to the buying behavior of any of the new buyers that you've been bringing on through the marketing relative to your legacy buyers? Then the second one on seller services. You talked about rolling out more seller services over time. Just run through kind of strategically how you think about evaluating new potential seller services and rolling them out to new sellers.
Great. I'll take the seller services question first. First of all, it's important to understand how we think about seller services, and we talked about this in our roadshow and in our S-1. Our focus in building seller services is really about reducing the amount of time that our sellers spend on administrative tasks, things like inventory management, marketing, communications, et cetera, so that they can increase their time on the making task. As we talked about in the roadshow and in the S-1, for every hour our seller spends on creative tasks, spends an hour on business tasks. We really believe that, looking ahead, there's an opportunity to add more services that save time in those areas like inventory and such. Shipping, we've seen some progress in this quarter with calculated shipping and some of the other services I talked about.
We're not ready to announce any services today. You can expect over the long term and over time that we build services that help our sellers save time and money.
To answer your second question, Brian, as it pertains to which countries we advertise in, I would just remind everyone that our largest marketing expense by a wide margin is PLAs. We advertise and have advertised for some time, it's not new to 2015, in a broad spectrum of countries around the world. We do focus on the key countries that we've mentioned in the past, being Canada, Australia, U.K., France, and the rest of Western Europe. Your second question with regard to repeat purchases, you might remember in the S-1, we focused on a chart that showed that historically, nearly three-quarters of our purchases were repeat purchases, repeat buyers. In 2014, even though we increased our marketing expense by 122% year-on-year, our repeat purchases as a percent of total GMS remained at three-quarters.
That tells us that the buyers that we acquired in 2014 looked a lot like the buyers who were already loyal and faithful to the Etsy platform. We're continuing along that path as we think about our marketing expense. Just again, to remind everyone, our long-term value model for marketing expenditure is based on two years. It's railed to be ROI positive at an aggregate level across the company. It assumes that a paid buyer, or rather an acquired buyer, performs differently than an organic buyer. What we've seen thus far, what you might infer from our 2014 performance, is that paid and organic are performing rather similarly. Over time, that could change as we acquire more buyers with the success of our marketing plan.
Okay, great. One more follow-up, I guess. There's a lot of questions around fraudulent and/or counterfeit goods. Could you just talk to the way Etsy works to police that and how you think about the presence of non-licensed products on the site? Thanks.
First of all, we won't comment on any litigation, Transparency is one of our values, I want to take some time to answer this question. We were really proud when the Electronic Frontier Foundation awarded Etsy four out of five stars for our intellectual property practices. We ultimately lost a star because we don't issue a transparency report. We've been working on that transparency report for the last few months, and we plan to publish that in the future. Based on the work that we've done for the transparency report, we're able to give you today some insights into our great effort and our success in combating IP infringement. I want to stress three points. First, we earn respect by following industry-leading best practices and established law.
The second is that someone on the outside looking at our site lacks the context and the background information to determine what's infringing and what's not. Third, we strive for a balanced approach that takes into account the interests of our sellers and IP owners, and we believe that's working. We at Etsy partner with major brands to address the problem of infringing articles. In fact, we're often accused of being too aggressive in taking down material posted by sellers. It's important to note that I'm not using the word counterfeit. People can't even agree on the definition of that term. To avoid confusion, I'll address the broader issue of items that appear on the Etsy website that appear to misuse intellectual property. Now I'll dive deeper into those three points. The first point about earning respect by following industry-leading best practices and established law.
It's certainly true that brand owners complain to us about infringing items appearing on Etsy. Our experience has been that when we engage in a cooperative and transparent way with brand owners, we enjoy a productive and beneficial relationship and partnership with those brands. Etsy has a dedicated legal support team that responds to proper takedown notices by promptly removing content and providing the Etsy seller an explanation of what happened and the contact information of the notifying party. We also terminate accounts of repeat offenders, we use technology to prevent bad actors from returning to our marketplace. All of our practices are based on the Digital Millennium Copyright Act, the Communications Decency Act, the Lanham Act, which governs trademarks, the Copyright Act, industry best practices, and established case law.
The second point, that is, again, that someone on the outside looking at our site lacks the context and background information to determine what is infringing and what is not. It's tempting to play judge and jury, but only someone authorized to act on behalf of the IP owner has the legal and business background information to decide if something is problematic, and if so, what to do about it. Some brands may see a specific use as free advertising or fan art or otherwise fair. Others may see it as infringement and ask that it be removed. To give you an example, several years ago, an attorney representing a longstanding children's television show requested that Etsy remove a handful of items. She noted that although many Etsy listings made reference to the brand, only a few could damage the brand's reputation, those she considered infringement.
The remaining items were fan art. She allowed them to continue to be sold on Etsy. Further, some of the items were over 20 years old and could be legally sold in our vintage category. The third point, that we strive for a balanced approach that takes into account the interests of our sellers and the IP owners. We believe it's working. We partner with major brands to address the problem of infringing articles. In fact, as I said earlier, we're often accused of being too aggressive in taking down material posted by sellers. Etsy works with brands to influence the technology that we use to proactively locate, take action, and prevent bad actors from returning. We continually update that technology because bad actors are always updating their tactics. For security reasons, we can't provide detail into those systems.
At the same time, many sellers complain that we go too far in taking down infringing items and closing shops based on our policies. In one blog post that anyone with an internet connection can access, an Etsy seller here in the U.S. described a frustrating and frightening, confusing account of her back and forth with a rights holder. She spent three weeks going back and forth with the rights holder's in-house counsel before resolving her issue. She advises other Etsy sellers in this blog post to be careful with copyright based on her experience with Etsy enforcing takedown notices from rights holders. I want to quote from this blog post. She wrote, "Just a couple of weeks ago, one of the members of my friend Beth had their store shut down for copyright infringement.
I know others that have had theirs shut down as well. A few lucky ones have gotten theirs reopened, but that is rare. One of my members has a friend that got her Etsy shop taken down because the candy she was making infringed on someone's copyrights. If you think this just applies to paper or products like plates, et cetera, it doesn't. It's anything that you make that you use someone else's images for. She made an even bigger mistake. She started a new shop under a new name. Etsy found out and not only shut her shop down but banned her from Etsy altogether. She cannot even shop on Etsy anymore. They don't mess around." That's the end of that quote.
Consistent with our goal of supporting Etsy sellers, we also provide plain English education on intellectual property topics in lots of forms, ranging from blog posts to seller handbook articles and Q&A sessions in our forums. The final note, Etsy's in-house attorneys have participated in working group conversations among service providers and the U.S. Patent and Trademark Office about intellectual property and marketplace liability. We believe, in conclusion, that the facts and the data give us good reason to be proud of the work that we do to combat infringing materials.
Great. Thanks.
Thank you. As a reminder, ladies and gentlemen, to ask a question at this time, please press star followed by the 1 key. Our next question comes from Tom Forte of Brean Capital. Your line is now open.
Great. Thanks for taking my question. Recognize that today, a lot of the international revenue comes from cross , I wanted to give you to talk about your local efforts, how you're generating revenue on a local basis that would be less dependent and those efforts will drive revenue dependent on or less affected by movements in.
We're sorry, we can't hear the full question. I think the phone's cutting out.
Apologize for the bad connection. Basically, on international, I recognize that today a lot of your revenue comes from cross-border trade, but I think you have initiatives underway to drive local revenue, so revenue in an international country among a local marketplace. Can you tell us about those initiatives, and when should we expect that revenue to start hitting so you'll be less affected by changes in the U.S. dollar?
Right. It's important to note our building local marketplaces globally strategy, which is really about, again, building on the activity in markets where there's relatively balanced buyer and seller activity. We are seeing momentum, particularly in the U.K., as I mentioned earlier. We're seeing growth in purchases from U.K. sellers, domestic activity, seven times higher than the growth in purchases from U.S. sellers to cross-border activity. We really think that this means that that local community is really connecting. We believe that over time, encouraging this type of local commerce in our priority markets, Kristina mentioned the U.K., Australia, Canada, Western Europe, that will be a positive influence on the global success of Etsy. We're seeing that early success in the U.K.
Tom, if I could just
Thank you
Add to that. If I could just add to that, Tom, with a clarifying point. It is important to understand that the number of our sellers who list in US dollars, so even on a local-to-local basis, that can sometimes impact price that local buyers are seeing. As it stands today, 92% of our GMS comes from sellers who list in US dollars, even though 30% of our GMS comes from international. Only 8% of our GMS is coming from sellers who list in local currency. One of the opportunities we have over the longer term, which is actually quite a complex technical operation, is to encourage and facilitate more and more sellers listing in their local currency, which also could benefit a more balanced local ecosystem over time.
Great. Thank you.
Thank you. Our next question comes from Gil Luria of Wedbush Securities. Your line is now open.
Yes. Thank you very much for taking the question. I will ask a couple upfront. First of all, to follow up on the counterfeit, Alibaba and eBay over the years have said very similar things in terms of the efforts they put in to getting counterfeit merchandise off the website. Yet the brands and the luxury brands, or at least a variety of them, have seemed to crack down on it more and more. Yesterday, we saw a new lawsuit against Alibaba. They are dealing with the government. Despite the fact that they say very similar things about their commitment to preventing fraudulent merchandise, so I wanted to know why you think that further scrutiny won't impact Etsy going forward. The second question about the impact of currency.
eBay has a similar issue in terms of when the US dollar goes up, it takes away from the purchasing power of European consumers. On the flip side, and what's an offset for them, is that U.S. consumers can then afford to buy more outside the U.S. Their purchasing power goes up. Since you have an even higher mix of U.S. consumers that now have more purchasing power vis-a-vis merchandise outside the U.S., why wouldn't you have an offsetting impact from that?
I'll take the first question. As I said in my earlier comments, we're not going to comment on litigation. I'll hand it over to Kristina for the second question.
Sure. From a perspective of U.S. consumers enjoying relatively lower pricing, I would point you back to the comments that I made on the dollar pricing. 92% of our GMS comes from sellers who list in U.S. dollars. Another way to think about that is the majority of our sellers who sell on Etsy, even if they're located outside of the U.S., are listing in U.S. dollars. As I said before, an opportunity we have is to encourage sellers to list in their local currency rather than in U.S. dollars and to facilitate that from a technical perspective. When we think about U.S. consumers enjoying a strong dollar, that doesn't play out in the way that our sellers currently list the pricing of their items.
Wouldn't some sellers just recognize that and with their currency being that much lower the U.S. dollar price even if that's not done automatically?
We haven't seen that behavior. It's important to understand too that the $0.20 listing fee is a $0.20 listing fee, no matter where you reside. To a certain extent, a seller outside of the United States has dollar exposure in the cost of the listing fee. We haven't seen the kind of behavior where our sellers might be reacting to fluctuations in currency and to change their pricing. It's also important to remember, relative to some other marketplaces that perhaps have significantly larger sellers on their platform who sell more commodity type, mass manufactured goods, Etsy sellers are more micro entrepreneurs. Adjusting their pricing on a even weekly basis dependent on currency fluctuations might not be something in their tool set.
Got it. Thank you.
Thank you. I'm showing no further questions at this time. I'd like to turn the conference back over to Chad Dickerson for any closing remarks.
Great. I just wanted to thank everyone for joining us on this first earnings call for Etsy, we look forward to speaking with you next quarter. Thank you.
Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. You may all disconnect.