Chinese and Turkish electronics helped Russian retailers with sales
Source：Vedomosti
From：Taiwan Trade Center, Moscow
Update Time：2023/12/31
The total turnover of the M.video-Eldorado group in the third quarter of 2023 amounted to 140.3 billion rubles, which is 40% more than it was a year earlier. This is stated in the company's statements. It follows from it that this indicator is even higher than the level of the third quarter of 2021, which was a record for the company (134.7 billion rubles with VAT). The company's total online sales for the reporting period increased by 50% to 98.1 billion rubles (including VAT). The group's EBITDA will exceed Rub 4 billion, increasing by more than 80% year-on-year. The debt burden has slightly decreased: now the ratio of net debt to EBITDA is 5, whereas in the first half of the year this indicator was at the level of 5.2.
Nevertheless, according to the results of nine months, the turnover of M.video-Eldorado is still 0.9% behind last year: total sales amounted to 359.3 billion rubles against 362.4 billion rubles in 2022. The company does not disclose profit data. The total number of stores at the end of September was 1,213 outlets of all formats.
M.video-Eldorado managed to take advantage of inflationary growth and an increase in consumer lending, which stimulated the number of purchases of equipment and electronics (the group's credit sales increased by 80% in the third quarter), said Mikhail Burmistrov, CEO of Infoline-Analytics. Indeed, this entire segment of the Russian market is growing, confirms the editor-in-chief of Mobile-Review Eldar Murtazin. For example, in 2021, about 32.5 million smartphones were sold in the country, about 26 million in 2022, and the forecast for the end of 2023 is 33-33.5 million devices. Nevertheless, the dynamics of the company lags behind the market as a whole by 6-7%, adds Burmistrov.
Among the factors that contributed to the growth of financial indicators, the reports also mention the stabilization of supplies and the expansion of the assortment by 35%, including at the expense of fast-growing brands (mainly Chinese), such as Haier, Hisense, Huawei, Grundig. At the beginning of the year, some of the positions in M.video-Eldorado were closed by deliveries from AliExpress, which is why the competitiveness of such goods in terms of price was low and the network was losing to other players - DNS and the largest marketplaces, says Burmistrov. According to him, the development of direct imports from China and Turkey contributed to the improvement of indicators. This allowed the retailer to reduce the lag behind DNS in revenue (a record 601 billion rubles in 2022 against 488.9 billion rubles from M.video-Eldorado), as well as in the representation of its own trademarks (STM) and the development of direct imports from the aforementioned countries, Burmistrov notes.
The share of STM (own brands) and exclusive assortment in M.video-Eldorado has grown to 11.5% of turnover. The retailer's own brands – Hi and Novex – are manufactured at the facilities of factories of a number of profile brands in Russia, Belarus, China and Turkey. Products for the STM of the main competitors of the network are also made there. For example, DNS has a contract Chinese production and domestic assembly (brands DEEP, Aceline, Kyron, etc.). And this year Wildberries (one of the biggest marketplaces) launched sales of household appliances and electronics under STM Razz, which are manufactured in China, in Russia and Belarus. Earlier, marketplaces Yandex.Market and Ozon followed the same path.
Experts expects that by about the end of the summer of 2024, M.video-Eldorado, while maintaining external factors, will reduce the debt burden to moderate and improve profitability. This will allow the company to increase its market share significantly.
Source: https://www.vedomosti.ru/business/articles/2023/10/25/1002325-kitaiskaya-i-turetskaya-elektronika-pomogla?utm_campaign=newspaper_25_10_2023&utm_medium=email&utm_source=vedomosti