Detsky Mir’s GMV Increases 16.9% in 2021
Moscow, Russia, 25 January 2022. Detsky Mir Group (“Detsky Mir”, the “Group” or the “Company”, MOEX: DSKY), a multi-vertical digital retailer and the leader in the children’s goods sector in Russia and Kazakhstan, announces its operating results for the fourth quarter and twelve months ended 31 December 2021.
Q4 2021 Operating Highlights
- The Group’s gross merchandise value (GMV) increased 8.5% to RUB 53.3 bn (incl. VAT).
- Total online sales in Russia grew 33.2% to RUB 18.9 bn (incl. VAT):
- The share of online sales in Russia reached 37.4%.
- The Group’s net revenue increased by 6.3% to RUB 47.3 bn.
- Sales of private labels and direct imports in Russia totaled 42.7% of total sales.
- The Company opened 105 new stores: 33 Detsky Mir branded stores in Russia, 2 Detsky Mir stores in Kazakhstan, 1 Detmir store in Belarus, 27 Detmir Mini stores, and 42 Zoozavr stores.
- The total number of Group stores amounted to 1,119 (+28.9% year-on-year) across 445 cities and towns in Russia, Kazakhstan, and Belarus.
- The Group’s total selling space increased 9.3% year-on-year to 980,000 sq. m.
- Total warehouse space was 175,000 sq. m.
FY 2021 Operating Highlights
- The Group’s GMV increased 16.9% to RUB 184.3 bn (incl. VAT).
- Total online sales in Russia increased 39.1% to RUB 54.0 bn (incl. VAT):
- The share of online sales in Russia reached 30.8%.
- The Group’s net revenue increased by 15.0% to RUB 164.3 bn.
- Sales of private labels and direct imports in Russia totaled 46.2% of total sales (+1.7 p.p. year-on-year).
- The Company opened 251 new stores: 72 Detsky Mir branded stores in Russia, 4 Detsky Mir stores in Kazakhstan, 8 Detmir stores in Belarus, 94 Detmir Mini stores, and 73 Zoozavr stores.
Q4 2021 Key Events
- Detsky Mir shareholders approved an interim dividend of RUB 3,842,800,000 for 9M 2021, or RUB 5.20 per ordinary share. The dividend amounted to 60% of the adjusted RAS profit for 9M 2021. The dividend payout for 2021 will total RUB 8.3 bn, up about 7% compared to that for 2020.
- The Company launched its third regional distribution center in the Novosibirsk Region. The fulfillment center, hosted by Russian Post, will ensure next-day delivery of at least 80% of online orders to Detsky Mir customers in the Siberian Federal District. At the fulfillment warehouse, Russian Post will be able to store simultaneously up to 200,000 SKUs from Detsky Mir’s product assortment, while shipping up to 90,000 online orders per month. The center will be able to handle goods of all categories, from diapers and toys to children’s furniture, strollers, and pet supplies.
- Black Friday brought in more than 1.5 million orders for Detsky Mir. Over the course of the event, more than 1.5 million orders were placed on our online store and mobile app, generating a total of RUB 3 bn. The biggest discounts were available from 6:00 pm on 25 November until 11:59 pm on 26 November, when more than 450,000 orders were placed for a total of more than RUB 930 m, up 37% from 2020.
- The Global Shopping Day set a number of online sales records for Detsky Mir. At the sale’s peak on 11 November, 273,000 orders were placed via our online platform and marketplace for a total of RUB 570 m – a 63% increase on last year’s event. At the same time, the range of products on offer topped 320,000 SKUs, with over 80% of our marketplace sellers taking part in the sales event, and the order processing speed reaching 18,000 fulfillments per hour.
- Detsky Mir opened its milestone 900th branded store and its 100th Detmir Mini store. The new branded store with floor space of more than 1,200 sq. m is located in a shopping mall in Krasnokamensk. The milestone small-format Detmir Mini store with floor space of 167 sq. m opened in Novovoronezh.
- Detsky Mir celebrated 10 years of operating in Kazakhstan. The first Detsky Mir branded store in Kazakhstan opened on 9 December 2011 in the Tulpar shopping mall, Astana. Today, Detsky Mir Group is the leader in the children’s goods sector in Kazakhstan. Over the past five years, the Company has expanded its presence in the country more than sixfold, growing the chain from 7 to 45 stores, with the current floor space totaling 40,000 sq. m.
- Detsky Mir won silver on Russia’s Best Employers List by Forbes and KPMG. In the third ranking of the country’s top employers, which rated 104 companies, Forbes and KPMG focused on corporate ESG practices. The panel of expert judges who compiled the ranking comprised specialists from rating agencies, environmentalists, and sustainability experts.
- The IR team at Detsky Mir Group was recognized as Russia’s best: the Company was placed top in the Best Corporate by Small Cap IR Russia 2021 category. This IR ranking has long been considered a top international recognition of investor engagement efforts by companies and their management teams.
- The Detsky Mir flagship store in the MEGA Teply Stan shopping mall earned a finalist finish in the Global Retail Real Estate Awards, an annual international industry award to celebrate achievements in retail and retail real estate.
- Detsky Mir won one of the most prestigious professional awards in e-commerce and omnichannel, Large Turnover 2021, in the Breakthrough of the Year category and was a finalist of its Grand Prix.
- Detsky Mir’s marketplace was recognized as the best niche marketplace in 2021 according to ECOM AWARDS, an e-commerce and retail professional award launched this year.
- In December, the Detsky Mir Charitable Foundation, part of Detsky Mir Group, announced that it would work with the Stolitsa Miloserdia Charitable Foundation, Pharmeco Group, and MC Intermark Auto to donate items to orphans and children from large and low-income families in St. Petersburg and the Novosibirsk Region. The donations, worth over RUB 6 m, included goods that children need: hygiene products, toys, apparel, furniture, strollers, and sporting goods.
- The Detsky Mir Charitable Foundation and Kimberly-Clark’s Huggies brand launched their first joint charity campaign – Appreciating Every Night. The initiative is aimed at helping children in hospices or palliative care units of hospitals.
- On the eve of its 17th anniversary, the Detsky Mir Charitable Foundation upgraded its visual identity. The logo retained the instant recognizability of the Detsky Mir brand but acquired its own identity: the signature colored cubes were replaced with hearts, which symbolize human emotions, care, and attention. The new logo and branding were launched on the Foundation’s home page at bf.detmir.ru and will later be rolled out across Detsky Mir Group’s retail stores.
- Three thousand customers of the Zoozavr chain took part in a campaign to help homeless pets. More than 890 kg of pet food and treats for dogs and cats were collected, as well as over 150 items of essential goods, including hygiene products, toys, and pads.
Maria Davydova, CEO of PJSC Detsky Mir:
“Last year proved that our decision to pursue an omnichannel growth strategy was a sound one. By delivering on our strategy, we have consolidated our leadership in the children’s goods market, becoming one of the largest and fastest-growing e-commerce players in the Children’s category. Key achievements include expanding the retail chain’s footprint, strengthening our federal and regional logistics infrastructure, seamlessly expanding our assortment by growing our online marketplace, as well as cutting down on delivery lead times for online orders and improving customer service quality across all sales channels.
2021 brought unprecedented new challenges for Detsky Mir and retail as a whole. From ongoing uncertainty amid the spread of COVID-19, new regulatory constraints, and shifts in the operational and logistics environment to rising inflation and the labor shortage – this series of challenges allowed us to once again prove just how effective our business model is and strengthen our leadership in the children’s goods market, both offline and online.
External factors, coupled with effective pricing, product range expansion, and rapid order fulfillment, helped drive a 34.7% increase in online store sales in Q4 2021, while the online segment made up a record 36.1% of Group sales.
We maintain our focus on building out an exclusive product offering through private labels and direct imports. Last year, the share of private labels and direct imports in total annual sales increased by 1.7 p.p. year-on-year to 46.2%.
We ended the year having broken a string of records in our online business; for example, during the height of November’s Black Friday sale, we processed orders totaling more than RUB 930 m, an impressive 37% increase from last year’s promotion. On top of this, the online channel’s total share of sales at Detsky Mir in Russia reached a record 37.4% in the quarter.
I should also highlight that we have met our annual expansion target for the retail chain, with most store openings, 105 new stores, taking place during the fourth quarter of 2021.
Our top priority in 2022 continues to be the further consolidation of the children’s goods market, with our key focus being on effectively expanding our underlying logistics, retail, and digital infrastructure to deliver solid performance both offline and online in a shifting market environment. Achieving leadership across all e-comm products in terms of mobile app and online store usability, and launching new digital services continue to be a key pillar of our digital strategy.”
For additional information:
Head of Public Relations
Tel.: +7 495 781 08 08, ext. 2041
Head of Investor Relations
Tel.: + 7 495 781 08 08, ext. 2315