eShopWorld On Course to Reach €1 billion Turnover
POST-COVID SALES TOP BLACK FRIDAY PEAK MONTHS
Current volumes would equate to €1bn turnover annually as UK and EU brands turn to ecommerce for global growth
Friday, 19th June 2020: Global ecommerce provider eShopWorld today publishes an overview of its 2019 operating performance and outlook for 2020. 2019 saw global turnover increase by over one third to €543.6 million, supported by continuing investment in its market leading ecommerce platform.
EBITDA in the period increased to €13.5 million (2018: €6.5 million). Operating profit improved more than 3-fold on 2018’s outturn, to €6 million in 2019, with profit after tax €3.4 million higher at €5.4 million. Annual investment of approximately €20 million has ensured a scalable ecommerce platform, with scope to accommodate multi-billion dollar turnover and provide premium global brands with sophisticated data analytics and complementary marketing services.
The turnover increase of 34% was driven by Europe, up 46 per cent, which now accounts for two thirds of sales on the platform. Given its high disposable income and tech savvy population, Europe is now seen as a major growth market by North American brands with universal appeal – an important consideration for UK brands, with Brexit looming large. However, local markets in Europe, Asia, and Australia, amongst others, are now viewing ecommerce as a key engine for growth in established markets such as the US, as well as emerging markets with a rising middle class, in markets such as China and India. This ecommerce drive is seen as a key route to market, helping offset the effects of physical distancing and a weaker economic backdrop.
Post year end, Covid has driven a dramatic step-change in ecommerce as consumers embrace online shopping and luxury brands seek global growth and more agile routes to market. Since March 2020 platform sales have consistently exceeded 2019 Black Friday peak months with multiple markets* recording sales increases of 200+ per cent in May 2020 relative to May 2019. A continuation of current volumes would equate to €1 billion of sales annually, or a doubling of volumes for global brands using the premium platform.
Commenting, CEO, Founder and shareholder, Tommy Kelly said:
“We are very pleased to have added almost 20 premium brands to our platform in 2019 and to have delivered growth in reach, turnover, profitability and functionality. Brexit was a factor but Covid is also accentuating a structural shift in retail as brands focus on more agile route to market strategies and direct to consumer relationships in a premium environment.
“The debate between ‘bricks & mortar’ versus online shopfronts has now moved on as physical shops are increasingly about experiential shopping. In the online arena, brands are now having to choose between premium or owned-platforms and discount-focussed channels like Amazon.
“Speed to market is a key consideration as brands can now enter new international markets and be up and running in as few as 12 weeks, up to six times faster than if they attempted to do so on their own. In addition, real time data analytics are enabling brands to redirect product to regions of highest demand and optimise brand margins in what has become a golden age for ecommerce trailblazers.
“In a pandemic world, there is incredible opportunity beyond domestic channels, particularly for apparel. As consumers around the globe turn to e-commerce our data show that brands that are able to move quickly to deliver a localised e-commerce experience are seeing 300% to 400% growth in sales.
“Our journey with North American brands as early adopters shows that growth is being driven by non-domestic markets. UK and EU brands now ‘want-in’ and accounted for almost 60 per cent of premium brands joining our platform in 2019. Beyond Covid 19, we believe a step-change has occurred in ecommerce and we see our platform as an ecommerce bridge between global brands and local shoppers” Mr Kelly added.
- Platform sales in Europe increased by 46 per cent, relative to 10 per cent in the US
- Europe now accounts for almost $7 in every $10 sales of sought-after US brands
- Strong growth in intra-EU trading – a trend that is expected to continue
- 12 European brands added to the platform in 2019
- Strong inroads in Asia, with platform sales almost doubling, albeit from a lower base
Brands with a strong online presence are more valuable and garner stronger brand loyalty and premium status than those without. According to B&A Techscape Report 2020:
- Clothes are now on par with flights and hotel bookings for ecommerce
- 89 per cent of females buy clothes online (higher than flights or hotels)
- 3 in 4 GenZ follow brands also research products online when in a store
- Under 50 year olds are driving eCommerce and digital engagement (75% purchase online vs 38% over 50’s). However, this gap is expected to narrow post Covid.
Headcount at eShopWorld increased by 109 staff in 2019 to 369 and is expected to reach 450 by year end 2021. These are mainly technology, product, finance and operations roles with about one quarter across sales, marketing and administration. eShopWorld has offices in Ireland, the US, Singapore and the Netherlands.
2019 Performance Review:
- Up €137m to €543.6m (+34 per cent) on 2018
- 9-fold increase (€483m) since 2016
- EBITDA more than doubles to €13.5m (2018: €6.5 million)
- Delivering for Global Brands:
- Platform includes 5 of the world’s top 10 apparel brands
- 16 major brands added to the platform in 2019
- 12 UK / EU additions
- Investment & Staffing
- Annual platform investment of almost €20m
- Headcount up 109 and on course for 450 by year end 2021
- Data analytics a key differentiator as global brands seek to direct product to higher demand, higher margin markets
Covid impact and 2020 outlook:
- Strong tail-wind as Covid accentuates structural shift in retail as brands focus on route to market strategies and direct to consumer relationships
- May 2020 sales surge: ranging from the UK (+146 per cent) to Mexico (+258 per cent)