Page 10 - bne IntelliNews monthly country report Russia February 2024

Ozon is the largest asset in Baring Vostok's Russian portfolio and should have been another “homerun,” as Calvey described the investment into Russian search engine Yandex in an interview with bne IntelliNews.
The increased interest in Ozon is understandable: despite the war and the massive departure of brands, the second largest Russian marketplace continues to grow. Over the nine months of 2023, the turnover (GMV) of the marketplace increased by 110%, to RUB1.12 trillion, revenue - by 62%, to RUB296bn. Now the marketplace is actively used by 42.5mn people - and their number has grown by approximately 30% for three quarters in a row. The number of orders for the third quarter increased compared to last year by 134% to 251mn, The Bell reports.
Ozon is gradually learning to make money not only from selling goods that it purchases itself and from marketplace commissions. Of the total revenue, sales of own goods in the last reporting quarter accounted for 36.6%, commissions - 38.4%. And almost 18% goes to advertising, although a year ago its share in the revenue structure did not exceed 10%. Fintech is also starting to grow: 3.2% of total revenue versus 0.4% last year. In addition, the marketplace was the first among its competitors to decide to try selling cars.
In November, Ozon launched sales in Uzbekistan, and next year it plans to begin building its logistics there. In addition, the company is already developing delivery in Kazakhstan, Belarus and Armenia.
Until now, Ozon preferred to grow while sacrificing profitability, and given the fierce competition in the market, shareholders put up with this. Ozon's net loss for the nine months of 2023 amounted to RUB24.5bn - however, this is 48% less than it was a year ago. And adjusted EBITDA in the third quarter turned out to be negative - minus RUB3.9bn - due to investments in platform development and “significant increases in labour costs,” the report said. But over nine months it remained positive, amounting to RUB4.1bn rubles.
The company's finances are being pressured by rising interest costs and revaluation of financial instruments, she said in the report. At the same time, Ozon still has to increase investments in order to catch up with the market leader Wildberries.
The fight for Ozon could mark the start of a new consolidation in the industry. The e-commerce market in the country could grow to RUB7.4 trillion by the end of 2023, and by 2027 it could even double, exceeding RUB15 trillion, Data-Insight predicts. At the same time, the two largest players - Wildberries and Ozon - account for up to 77% of all online orders during peak months. And their market share this year will be 53% between them. Third by a significant margin is the Yandex marketplace - Yandex itself may change owners before the end of the year.
10 RUSSIA Country Report February 2024 www.intellinews.com