Detsky Mir’s GMV Increased by 11.6% in Q2 2022
Moscow, Russia, 19 July 2022 – Detsky Mir Group (“Detsky Mir”, the “Group” or the “Company”, MOEX: DSKY), an omnichannel digital retailer and the leader in the children’s goods sector in Russia and Kazakhstan, announces its operating results for the second quarter ended 30 June 2022.
Q2 2022 Operating Highlights
- The Group’s gross merchandise value (GMV) increased 11.6% to RUB 46.7 bn (incl. VAT).
- The Group’s total online sales grew 7.3% to RUB 12.7 bn (incl. VAT):
- The share of online sales in Russia reached 27.9%.
- The Group’s net revenue increased 10.5% to RUB 41.3 bn.
- Sales of private labels and direct imports in Russia came in at 56.7% of total sales (up 8.8 p.p.).
- The mobile app’s monthly active users (MAU) grew 29.0% to 4.0 million.
- Total marketplace sales in Russia increased 140.5% to RUB 1.4 bn (incl. VAT):
- The marketplace’s share in total online sales in Russia was 11.0%.
- The total number of Group stores amounted to 1,123 (up 194 stores year-on-year) across 442 cities and towns in Russia, Kazakhstan and Belarus.
- The Group’s total selling space increased 6.5% year-on-year to 981,000 sq. m.
- Total warehouse space was 238,000 sq. m.
H1 2022 Operating Highlights
- The Group’s GMV increased 9.7% to RUB 89.3 bn (incl. VAT).
- The Group’s total online sales grew 13.4% to RUB 25.8 bn (incl. VAT):
- The share of online sales in Russia reached 29.9%.
- The Group’s net revenue increased 8.3% to RUB 79.2 bn.
- Sales of private labels and direct imports in Russia came in at 51.0% of total sales.
- The net increase in the Group’s store count was four stores.
Q2 2022 Key Events
- Between March and May 2022, the share of private labels in sales at Detsky Mir increased across several categories. The share of private labels in diaper sales more than doubled year-on-year to 33.2% (+19.4 p.p. compared to the same three-month period last year). In toys, private labels grew 9.6 p.p. to 40% year-to-date, while in apparel and footwear they accounted for 98.8% of revenue, a 1.6 p.p. increase year-to-date. In pet supplies, the share of the Company’s private labels, launched just this year, was 10.1%.
- An option for payment via the Faster Payments System (FPS) is now available at more than 900 of our branded stores across all Russian cities within the Group’s footprint. The wide range of partner banks makes the FPS payment option available all across Russia. An FPS online payment service will soon also be available on detmir.ru.
- The Detsky Mir Charitable Foundation launched a new project to support families – the Kids Card, which is aimed at families facing difficulties, from those with many children, to those raising children with disabilities, as well as single-parent families. The neediest families receiving support from social protection agencies in the Krasnoyarsk and Altai Territories, the Republic of Mari El, the Karachayevo-Circassian Republic, and the Kabardino-Balkarian Republic, as well as the Kurgan Region, were all issued a Kids Card with a face value of RUB 5,000 per child under 18.
- Moya Goroshinka, Detsky Mir’s private label collection of apparel for newborns was recognized as the Product of the Year and received the ECO BEST independent public award for the best environmental and resource-saving products and practices.
- Appreciating Every Night, a joint initiative of the Detsky Mir Charitable Foundation (part of Detsky Mir Group) and Kimberly-Clark Corporation, won the annual Best Social Projects in Russia program, the country’s largest corporate social responsibility-themed event.
- Detsky Mir worked with Meine Liebe to launch a charity campaign to furnish orphanages with home accessories, helping teach children in their care to adapt to independent life.
Maria Davydova, CEO of PJSC Detsky Mir:
“In the first half of 2022, despite high levels of uncertainty in the retail industry and the wider Russian economy, the Group delivered strong operational results with GMV rose 9.7% to RUB 89.3 billion, while GMV for Q2 2022 grew 11.6% and reached RUB 46.7 billion. We also expect an increase in operating profit (adjusted EBITDA) for the period.
Responding to the challenges of the first half of 2022, we optimized our logistic routes while continuing to work on improving related processes. We also maintain our focus on selecting and adding products from new suppliers to our product mix to mitigate the potential risk of certain brands leaving the Russian market. At the same time, the Company implements strategic initiatives to increase the share of private labels and direct imports in total sales in Russia, which reached 56.7% in the second quarter of 2022 (up 8.8 p.p. year-on-year).
We continue implementing our key digital projects and promoting our online channels. For example, the marketplace’s contribution to the Group’s GMV rose to a record high of 11.0% of the Group’s total online sales in Russia (up 6.1 p.p. year-on-year). Total marketplace sales in Russia soared 140.5% year-on-year to RUB 1.4 billion. Detsky Mir’s online assortment has increased to 902,000 unique SKUs over the year.
We have noted a moderate overall recovery in consumer confidence in the second quarter of 2022, yet will continue to factor in the ongoing high uncertainty around key macro indicators in the second half of 2022 when making both operational and investment decisions.”