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GFG NMV increases 22.7% to €449 million in Q2 2019

Aug '19
Pic: GFG
Pic: GFG
The Net Merchandise Value (NMV) of Global Fashion Group (GFG), the leading online fashion and lifestyle destination, increased 22.7 per cent on a constant currency basis to €449 million in Q2 of 2019 from €371 million in Q2 of 2018. The revenue growth was 16.5 per cent as Marketplace share expanded to 19 per cent of NMV, up from 14 per cent in Q2 last year.
Active Customers for the company grew by 14.6 per cent to 12 million, with NMV per Active Customer up 7.1 per cent to €131, underpinned by GFG's leading customer experience. Number of orders grew by 25.4 per cent to 8.9 million; customers are purchasing 8.8 per cent more often at 2.6 times per year. Profitability is on track with adjusted EBITDA margin of (0.9) per cent, said GFG in a press release.
Operational developments in the first half of 2019 have enhanced the delivery experience offered in South East Asia and CIS. 'Zalora Now', a subscription programme including free next day delivery, was launched in Indonesia, while the own and third party pick-up point network in CIS grew to cover over 12,000 locations. In Brazil, construction of the new fulfilment centre is well-progressed and on track to open in 2020.
Technology innovations focused on app functionality have delivered new levels of customer engagement and strengthened GFG's app-first approach. GFG's apps generated 47 per cent of NMV in Q2, up 7 per cent compared to the same period last year.
In the first half of 2019, GFG's broad assortment strategy evolved with more exclusive global brand collaborations, further development of the modest fashion segment with another successful Hari Raya festival season in South East Asia, and the launch of a new way of shopping sustainably with The Iconic Considered.
"We have had a strong second quarter and made good progress against our strategic priorities. Through our focus on offering inspiring and seamless customer experiences from discovery to delivery, we attracted more customers, who purchased more often, and spent more on a per customer basis. As we scale, we are using our growing operational leverage to translate this growth into improving margins and continue our path to profitability," said Christoph Barchewitz and Patrick Schmidt, co-chief executive officers. 
GFG remains confident in its outlook for the year and expects to deliver NMV constant currency growth of 20-23 per cent, and achieving NMV of €1.7-€1.8 billion. Revenue is expected to exceed €1.3 billion, whilst continuing to make further progress towards adjusted EBITDA breakeven. Having invested €25 million in the first half of the year, GFG now expects 2019 capex to be around €80 million due to phasing benefits and the results of continuously optimising its ongoing investment plans. (PC)

Fibre2Fashion News Desk – India

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September 2019

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