New York (CNN Business)In just a matter of months, reusable face masks — the kind you wash and wear — have quickly evolved from being a niche product to an essential public health item in the fight against the spread of the pandemic.
This has led to a sudden, immediate consumer demand for cloth face masks for daily use. Everyone from home crafters on Etsy to large retailers like Gap and Walmart are now selling fabric face masks.For Etsy (ETSY), an online marketplace for crafters who sell everything from homemade jewelry to clothing and furniture, face masks have erupted into the platform’s hottest new product category.
The company, which reported earnings on Wednesday, said 110,000 Etsy sellers sold a total of 29 million face masks worth $346 million in its second quarter. “These are really big numbers. It’s hard to wrap your head around them, but to give you some sense of scale, that’s enough masks to stretch all the way from New York to London,” Etsy CEO Josh Silverman said in a call with analysts.Read MoreBut even without mask sales, Etsy’s sales were boosted by purchases of home decor, housewares and furniture as homebound families spruced up their living spaces.
Etsy said it sold 29 million reusable face masks in its second quarter.Stay-at-home orders have “created a moment when everyone’s [shopping] habits are up for grabs,” said Silverman. “Suddenly before you go buy anything, you’ve got to stop and think for yourself, where can I go to get that, and in that pause, Etsy is winning.”Still, it’s face masks that drove a sizable chunk —14% — of all sales in the period. Etsy said 7% of its buyers, or 4 million people, came to its marketplace just to buy face masks.
Could demand for face masks hit a tipping point?
As demand for cloth masks exponentially shoots up, it’s still anyone’s guess on how big the face mask economy could get.Despite the overwhelming dominance of face masks on Etsy right now, Silverman said it’s unclear whether demand will hold or start to wane.”When government agencies like the CDC or similar agencies in international markets recommended mask usage, we do see a spike in mask purchases. But it does tend to fluctuate state-to-state, county-to-county, country-to-country to the point that it’s pretty volatile and frankly quite hard to predict.”Market estimates for face masks range anywhere from $1 billion in sales by 2021 to as much as $9 billion, assuming that 50% of the US population will be wearing a reusable mask by this time next year.”Reusable face masks are something that most people didn’t have a few months ago. Over time, the face mask market will evolve in many ways,” said Edward Yruma, analyst with Keybanc Capital Markets, which made the $9 billion projection. “Masks won’t only be tied to a health and safety function but a fashion statement as well.”According to Yruma, reusable face masks are sold for about $9 to $11 a mask. The $9 billion figure is based on consumers purchasing an average of five masks each for personal use.Yruma said the five masks per person estimate is based on a sampling of retailers who were asked how many masks customers were buying on average.Plus, he said given the current guidelines from Centers for Disease Control and Prevention (CDC) that people should wear a clean face covering every day, Yruma said households are likely to buy five or more masks per family member to last through the work week.
From niche to mainstream
Cloth face masks, prior to the pandemic, represented a very niche market. That market has now accelerated very rapidly, resulting in a wide range of forecasts for its potential growth. Aside from crafters, large retailers like Walmart (WMT), Target and Gap (GPS) have also jumped on the face masks bandwagon.A report from Chicago-based global market research firm Arizton Advisory and Intelligence, estimates the cloth face mask market will reach $800 million in the US, and $3 billion globally, by the end of 2020.Neil Saunders, retail analyst and managing director of GlobalData Retail, is also more reserved with his forecast.”From our data, only 21.4% of the US population have or intend to buy a cloth mask this year. And the average selling price is currently running at just over $6.50, admittedly this will rise as more expensive options come on the market,” he said.
Saunders projects for a 12-month period (May 2020 to May 2021), reusable face mask sales will reach $1.16 billion. “However, this is predicated on the assumption that mask mandates remain in place for the whole period and that the virus remains prevalent,” he said. “Once the virus starts to abate or a vaccine is found, mask wearing will drop back.”
Source: edition.cnn.com