The largest online shop Outlet makes a bold and obviously expensive step is investing in a competitor. What is preparing to company?
In the near future in Ukraine will be the deal of the year in the sphere of Internet trade. Two of the country’s largest marketplace — Rozetka.ua and Prom.ua — unite.
As reported yesterday, the CEO and founder of the Socket Vladislav Chechetkin, his company planned to buy stake Naspers (majority stake — Ed.) in the group of companies EVO. In addition to the giant Prom.ua also includes projects such as Bigl.ua, Zakupki.prom.ua, Crafta.ua, Kabanchik.ua, Vchasno.com.ua, Shafa.ua and others. The share of the founders of EVO — Nikolay paliyenko, Denis Gorovoy and Taras Murashko — transformirovalsya in the share of the combined company (Outlet+EVO). One of its main shareholders is the investment company Horizon Capital, which in 2015 invested in the Outlet.
The biggest market online store in recent years gradually transformirovalsya in the hybrid shop and the marketplace. If the first buys the goods and sells them on his website, the second lives from Commission income for the placement of the goods of other sellers. “Analyzing statements by Vladislav Chechetkina on sales on black Friday and the details of attendance of the site, it is possible to estimate the turnover of the Socket at the level of $300-400 million a year” — suggests the market expert and former marketing Director of the group Hello Eugene Rasuev.
The marketplace of turnover of the company EVO (Prom.ua, Bigl.ua, Crafta.ua, Shafa.ua) for the previous year — UAH 14.2 bn. Monthly on the marketplace EVO buyers make more than 2 million orders.
The transaction took place, it must still approve the AMC. Participants do not comment on financial details. Head of analytical Department of investment company Concorde Capital Oleksandr Parashchiy said that market multiples in similar transactions in this sector now amount to about 0.5-0.6 from the sales over the last 12 months. That is, to understand what it’s worth, their volume must be multiplied by these numbers. Steam says that this ratio can be applied only to Commission income and not turnover all sellers of the marketplace. But details of revenue and profit in EVO does not open. Given that the average Commission for selling on the marketplace can be a few percent, could be valued at hundreds of millions of UAH.
What Outlet EVO?
“A long time the Outlet has the image of the monster, which is hindering the development of small businesses, presses suppliers, and so on. It is not so,” said during his may speech at iForum Chechetkin. He admitted that very much was afraid to run the marketplace, because they thought that small sellers spoil its online store reputation — the quality of services will be lower. But in the first quarter of 2018, 28% of all units have already been delivered to customers Outlet its sales partners. There are already thousands. It turned out that in the race for the survival of small and medium-sized businesses are trading very well. And Outlet has something to learn from them. She even bought a big warehouse to its partners could place their goods. For each successfully completed sale marketplace receives 3% of the transaction.
If the Outlet now buy the marketplace EVO, its network of sales partners, as well as the experience of interaction with them will increase. And it would be a logical step in the development for business Chechetkina. Besides, the market of the marketplace will be practically no competitors, and the group company will be the only major player.
Preparing for something bigger?
Deal Outlet and EVO looks quite logical from the point of view of business development. But one question remains: where did the buyer get the money? At Horizon Capital, which could help Finance, to comment on this issue refused.
Several players put forward an alternative version concerning the purpose of the investment: the Outlet is preparing for a larger transaction, in which the object of absorption can be herself. Believe the head of the online Department at Helen Marlen Group Alexey Kavitsky. Back in February, he left something out, so our market is being prepared global e-commerce giant Amazon, and wrote about it on Facebook.
The kavitsky not alone in their assumptions. “In light of the longstanding rumors about Amazon and its approach to our region, it seems that it (the deal with EVO — Ed.) prerequisites in order for them to be sold more expensive. Not only from the point of view of increase of capitalisation, but also from the point of view of what the market will be no more of the other participants, which could in theory Amazon,” says managing partner F.ua Dmytro Pokotilo.
There are market participants who refuse to believe in a future. Thinks Eugene Reshev, the specificity of the business of any national e-commerce player is that he hardly will understand and attractive as a target for Amazon. “Yes, and Ukraine as a whole due to the relatively small domestic market, it is not clear how filled with imported goods not to be of interest to such companies,” he adds. According to the Director of Russian post Igor Smelyansky, on the way the arrival of Amazon in Ukraine there is one major obstacle — smuggling.
Dmytro Pokotilo makes another assumption: maybe the Outlet is preparing to go public.