Page 120 - RusRPTFeb22

OZON expects its GMV incl. services to grow 80% or more y/y in FY22 and aims to further improve its unit economics and efficiency gains. We note that Wildberries’ GMV was up 101% y/y in 4Q21, showing no slowdown in growth vs. 3Q21 (+101% y/y). Wildberries’ GMV was up 93% y/y to RUB844bn in FY21.
● Wildberries
Wildberries has released its GMV for 2021. The children goods category added 63% y/y to RUB116bn and accounted for 14% of the company’s total turnover. The reported figures are equal to 60% of the turnover at Detsky Mir, which is the leading player on the children's goods market in Russia. Wildberries’ share in the respective segment increased 7pp y/y to 17%, while Detsky Mir gained almost 4pp y/y to 26%, in 2021. Wildberries has cemented its #2 position in the children’s goods market, and we think that the speed at which it is developing will further narrow the gap between it and Detsky Mir. The latter needs to adapt to the rapidly changing market environment in order to preserve its leading position. Detsky Mir is developing its own marketplace (1mn SKU), which had RUB3.5bn of sales, or 2% of the total, as of 2021. The marketplace is to reach 10% of revenues by 2024 (RUB24bn, on our numbers), while the overall medium-term target for online sales is 45% of the total (we forecast it increasing with a CAGR of 22% in 2022-26F). In our view, a proactive approach and efficient execution from Detsky Mir are vital in order to adapt to the rapidly changing competition and secure its current market positions.
● Other
Softline has announced the acquisition of 85% in Academy IT, which creates, develops and deploys corporate training solutions, including in cybersecurity training. The terms of the deal were not disclosed, but we believe that it is relatively small. Softline has stated that it is targeting expansion in the fast-growing global edtech market, so the deal could contribute to implementing these plans. Overall, we believe that the deal falls into Softline's strategy of supplementing its organic growth with acquisitions, which could also help the company to expand its expertise. We continue to see Softline as an attractively valued stock. Our 12-month Target Price of USD 15 implies an ETR of 114%
Softline makes two new acquisitions to boost services capabilities.
Softline has announced the acquisition of a majority stake in SoftClub and the purchase of MMTR Technology on January 25. The two deals increase the number of software engineers at Softline from about 1,000 to 2,500, giving a strong boost to the services part of the company's business. The terms of the deals have not been disclosed.
120 RUSSIA Country Report February 2022 www.intellinews.com