Page 133 - RusRPTAug21

the total assortment is fashion, 40% is other categories.
· Detsky Mir’s prices are 4-7% lower than in Wildberries and Ozon in
marketplace and it has 10x higher 1P sales. The commission rate is
18-26%, aims to reach 20% in the next five years.
· In January 2022, it is to launch a DC in Ekaterinburg and two more
small regional ones in Novosibirsk and St Petersburg. The DC space
is to reach 220k sqm.
· Annual capex is RUB5-6bn until 2024. Regional DC capex is
RUB100-150mn, federal DC is RUB2bn-2.5bn. Detmir capex is RUB4.5mn per store, Zoozavr (pet goods) is the same, for Detsky Mir stores it is RUB10-10.5mn.
· Maintenance capex is 50% of the previous year’s D&A. Refurbishment capex is RUB400mn in 2-3 years. IT capex is RUB2bn.
M.Video’s GMV grew 38% y/y in 2Q21, surpassing forecasts. With the 24% y/y growth recorded for 1H21, we see upside risks to our and consensus FY21 revenue growth forecasts of c. 14% y/y. We also think that the retailer's strong 1H21 sales should bode well for its financial results (out on 17 August) and interim dividends. The results confirm that the recent weakness in the share price had little to do with the fundamental strength of M.Video’s business, and we expect the 1H21 financial results and dividend announcement to be the next positive catalysts for the stock.
M.Video’s GMV surged 38% y/y to RUB100bn in 2Q21, above our forecast of 34%. M.Video alone reported a 42% y/y growth, and Eldorado’s revenue was up 31% y/y.
For the first time, online sales grew slower than the retailer’s consolidated growth due to the very high base of 2Q20, when lockdowns forced customers to migrate from stores to online shopping. As a result, online sales were up 36% y/y, and their share in the retailer’s GMV was 68% vs. 67% in 1Q21 and 69% in 2Q20. Online penetration hit a record 86% for M.Video but fell q/q and y/y to 31% for Eldorado.
As a reminder, M.Video’s methodology for calculating online sales accounts for offline visitors that check in through consultants’ apps (in addition to the web and customer mobile app), but this system is not yet in place for Eldorado. Excluding such “online purchases in stores”, conventional online sales (the pickup of online orders in stores and home deliveries) accounted for c. 34% in 2Q21 vs. 57% in 2Q20 (the retailer’s stores worked as pickup points in April-May 2020).
The mobile app continued to be the key driver of online sales. Revenue generated by this platform (through both customer and consultant apps) more than tripled y/y in 2Q21, accounting for 64% of total online sales.
The retailer’s selling space expanded 4% y/y, as the company opened 12 M.Video stores and 27 Eldorado stores on a net basis last quarter. The average space of new Eldorado stores was c. 330 square meters,
133 RUSSIA Country Report August 2021 www.intellinews.com