Fsn E-commerce Ventures Ltd. · NSE:NYKAA
Fsn E-commerce Ventures — Q1 FY24 Earnings Presentation
54 slides from Fsn E-commerce Ventures's earnings presentation, Aug 11, 2023
Slide 1: FSN E-Commerce Ventures Limited
FSN E-Commerce Ventures Limited August 11, 2023 National Stock Exchange of India Limited BSE Limited Exchange Plaza, 5th Floor, Corporate Relationship Department, Plot No. C/1, G Block, 2nd Floor, New Trading Wing, Bandra – Kurla Complex, Rotunda Building, P.J. Towers, Bandra (E), Mumbai – 400 051 D
Slide 2: Investor Presentation Quarter ended June 30, 2023
Investor Presentation Quarter ended June 30, 2023 FSN E-Commerce Ventures Limited
Slide 3: Disclaimer
Disclaimer By attending the presentation or by reading the presentation slides you agree to be bound as follows: This Presentation is prepared by FSN E-Commerce Ventures Limited (“Company”) and is for information purposes only without regards to specific objectives, financial situations or needs of
Slide 4: Table of Contents
1 Performance Highlights 2 Our Businesses 3 Business Highlights 3a BPC Table of Contents 3b Fashion 3c SuperStore 4 Financial Performance 5 Dot & Key 3
Slide 5: Performance Highlights
Performance Highlights Y as
Slide 6: Q1 FY24: Delivering operational parameters in a challenging environment
Q1 FY24: Delivering operational parameters in a challenging environment GMV Revenue from Operations Gross Profit Rs. 26,678 MM Rs. 14,218 MM Rs. 6,186 MM +24% YoY Growth +24% YoY Growth +21% YoY Growth Gross Margin* 43.5% (89 bps YoY) EBITDA PBT PAT** Rs. 735 MM Rs. 97 MM Rs. 54 MM +60% YoY Growth
Slide 7: Sustaining growth in core business
Sustaining growth in core business All values in Rs MM % YoY Growth Consolidated GMV 24% BPC GMV 24% 26,678 21,558 18,508 14,888 Q1FY23 Q1FY24 Q1FY23 Q1FY24 2-Year CAGR 35% 2-Year CAGR 32% Fashion GMV 12% Others* GMV 92% 6,537 5,820 1,633 850 Q1FY23 Q1FY24 Q1FY23 Q1FY24 2-Year CAGR 34% 2-Year CAGR 1
Slide 8: Diversifying and growing customer base
Diversifying and growing customer base GMV Annual Unique Transacting Customers** Q1 FY23 Q1 FY24 Q1 FY23 Q1 FY24 3.9% 6.1% 0.4 0.5 2.0 2.6 27.0% 24.5% Rs 21,558 MM Rs 26,678 MM 0.4 11.0 MM 0.6 13.5 MM 63.5% 5.7% 63.7% 5.5% 8.1 9.7 YoY Growth % 24% 27% 12% 92% YoY Growth % 20% 39% 30% 27% BPC*** BPC
Slide 9: Beauty and Personal Care
Content and Technology and Beauty and Personal Fashion Marketing Supply Chain Financial review 8
Slide 10: Online BPC expected to grow at 29% CAGR in the next 5 years
Online BPC expected to grow at 29% CAGR in the next 5 years CAGR % Premiumization in BPC consumption Mass Premium 10% USD 31 Bn** 45% Spend on beauty within BPC to 55% grow disproportionately with consumer adopting to USD 10 Bn, sophisticated beauty routines 55% 45% 32% 2022 2027P USD 19 Bn** USD 3B
Slide 11: Existing customer drives GMV growth
Existing customer drives GMV growth % YoY Growth (%) Channel Wise GMV– Q1 FY24 GMV ( Rs MM) Existing Customers New Customers BPC Physical Stores – 8.2% +27%** Offline GMV growth YoY 24% 18,508 Growth driven by mix of new and old stores. Space increased by 43% YoY*** 14,888 21% 26% BPC physical store
Slide 12: BPC: Key Operational Metrics
BPC: Key Operational Metrics Quarter Quarter Quarter Ended Ended Ended Metric Unit Jun-23 Jun-23 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 2-year YoY growth CAGR Visits Million 205 211 221 204 222 234 250 231 257 16% 12% Monthly Average Unique Visitors Million 17.3 19.4 19.8 18.
Slide 13: Growing distribution of our House of Brands
Growing distribution of our House of Brands GMV of Owned Brands* (Rs MM) Annualized GMV % YoY GMV Growth 39% # Owned Brand Count Contribution of Owned 10 13 ~Rs 3.0 Bn ~Rs 1.3 Bn ~Rs 3.0 Bn % Brands to BPC GMV 2,317 Channel Wise GMV– Q1 FY24 1,663 Own Online Channel GMV – 27% YoY 32% Own Physical St
Slide 14: Building the beauty ecosystem with our partners as our pillars
Building the beauty ecosystem with our partners as our pillars Wide assortment ensuring something for everyone New brand launches 3,400+ International & Domestic Brands* Leading Global & Leading Indian Elemis Virtue Avimee Foxtale Luxury FMCG & D2C UK’s #1 skincare Global hair care Ayurvedic hair D2
Slide 15: Elemis - Brand Launch amplified across the Nykaa ecosystem
Elemis - Brand Launch amplified across the Nykaa ecosystem Nykaa’s Global store launched Elemis London Strong launch activations across Social Media Brand pages by Category Elemis, UK’s #1 Skincare activations & Range brand launched on Nykaa Global store Strong launch on the homepage with visibility
Slide 16: CSMS activation - Building India's daily skincare routine
CSMS activation - Building India’s daily skincare routine Campaign Proposition ● CSMS is India’s daily skincare routine ● 4 simple steps Cleanser. Serum. Moisturiser. Sunscreen ● Specifically created for Indian skin types ● Coined in collaboration with 100+ dermats across the country 105 MM 81 Nykaa
Slide 17: Brand Events: Korean Beauty x Nykaa – Beauty from the East
Brand Events: Korean Beauty x Nykaa – Beauty from the East Nykaa’s first ever ‘Beauty from the East’ Globally trending Korean Brands 11 MM Reach on Social on Nykaa Media 60+ Leading Influencers 16
Slide 18: Successful Pink Summer Sale reiterates Nykaa as the beauty destination
Successful Pink Summer Sale reiterates Nykaa as the beauty destination of choice Most loved activations ➢ Best prices on internet ➢ Flash sales 35% YoY Omnichannel GMV growth ➢ Personalised coupons ~2,000 brands participating Engagement across our App, Social and YouTube Massive influencer outreach
Slide 19: Easing the purchase journey through online finders & educational content
Easing the purchase journey through online finders & educational content Online product finders Creating game changing educational content In a minute with Get ready with Celebrity celebrities me makeup looks Lipstick CSMS Foundation Finder Routine finder Finder Viral makeup Excitement Beauty Basics
Slide 20: Technology led intervention to improve customer experience
Technology led intervention to improve customer experience Personalised recommendation & Buy Again & Wishlist nudges at the Intent drive navigation on Stream Loyalty nudges Cart Buy Again widget for Replenishment Personalised Loyalty nudges Wishlist prompt in the Cart Recommendation widgets & Launch
Slide 21: Fashion
Content and Technology and Beauty and Personal Fashion Marketing Supply Chain Financial review
Slide 22: Potential market size and its growth drivers
Potential market size and its growth drivers CAGR % Nykaa Fashion is part of the fastest growing online segment, i.e., the premium fashion market 14% USD 147 Bn** USD 49 Bn, Online Premium Fashion Market in 2022 33% (AOV > Rs 1,500) : 10 -15% USD 77 Bn** USD 15 Bn, USD 51 Bn, 19% 34% STORE USD 28 Bn
Slide 23: Maintaining healthy customer cohorts to drive growth across diverse business models
Maintaining healthy customer cohorts to drive growth across diverse business models % YoY GMV Growth Channel Wise GMV (Rs MM) GMV (Rs MM) NykaaFashion.com**** Owned Brands Others** Existing Customers New Customers 6,537 12% 5,820 7% 6,537 10% 14% 74% 5,820 12% 79% 56% 78% 70% Q1FY23 Q1FY24 44% 30% +
Slide 24: Fashion: Key Operational Metrics
Fashion: Key Operational Metrics Quarter Quarter Quarter Ended Ended Ended Metric Unit Jun-23 Jun-23 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 2-year YoY growth CAGR Visits* Million 98 115 115 113 118 122 137 127 126 7% 13% Monthly Average Unique Visitors* Million 13.4 16.2 16.4
Slide 25: The Platform: Partnering with brands to bring the best, curated assortment
The Platform: Partnering with brands to bring the best, curated assortment Expanding our portfolio to offer ample choice to our Global Store – bringing international brands to India diverse customers Brands (#) Style (MM) 650+* 4,000 1.8 2.0 Brands 3,500 3,000+ 3,000 1.5 International & 2,500 ** Dom
Slide 26: The Platform: Strong performance in our Pink Summer Sale May'23
The Platform: Strong performance in our Pink Summer Sale May’23 2,500+ brands ~16 Mn ~190K 1.2% Order to participation Visits Orders visit conversion 25
Slide 27: House of Brands: Consistent growth across channels
House of Brands: Consistent growth across channels % YoY GMV Growth Annualized GMV GMV of Owned Brands (Rs MM) # Owned Brand Count ~Rs 1.5 Bn ~Rs 1.4 Bn Contribution of Owned 30% % Brands to Nykaa Fashion GMV 11 13 Contribution from 3P % Channels to Owned Brands’ GMV 112 MBOs* 916 706 Offline 6 MBOs
Slide 28: House of Brands: Strengthening our presence across varied categories
House of Brands: Strengthening our presence across varied categories Women’s Women’s Women’s Jewellery & Bags & Lingerie and Home Men’s wear Western Wear Indian Wear Accessories Footwear Athleisure Twenty Dresses Twig & Twine Pipa Bella Gajra Gang RSVP Gloot Nykd IYKYK Azai Likha KICA MIXT Offering
Slide 29: House of Brands: Key collaborations elevating our brand presence
House of Brands: Key collaborations elevating our brand presence Pipa Bella Gajra Gang X X Rhea Kapoor Mahima Mahajan An exclusive collaboration Launched Enchanted with designer Rhea Kapoor Garden collection by Gajra to launch a collection of Gang in collaboration with premium and versatile designer
Slide 30: Building a strong omnichannel presence
Building a strong omnichannel presence Hosted the style guide event in our Bangalore Store STORE NykaaFashion.com 4* NykaaFashion MBOs 6* EBOs and 1,100* Selective doors 118* 3P MBOs 29 * As of June 30, 2023
Slide 31: Building strong engagement through educational and curated content
Building strong engagement through educational and curated content Celebration of Style series with key influencers Budget Travel Guide collection Editor’s pick – simplifying the discovery journey Workwear Guides for your wardrobe for new buyers Moment trends Latest in trend men Quick peek into Nyka
Slide 32: Technology enhancements to improve the buying experience
Technology enhancements to improve the buying experience AI based recommendation widgets User persona-based personalization Nykaa Fashion International AI based recommendation on dress paring Hyper personalization to Enabling delivery of 80+ designer labels in refined for relevant genders and catego
Slide 33: SuperStore
Content and Technology and Beauty and Personal Fashion Marketing Supply Chain Financial review
Slide 34: Large Addressable Market of ~USD 1-2 Bn; 3-5% EBITDA potential at scale
Large Addressable Market of ~USD 1-2 Bn; 3-5% EBITDA potential at scale BPC Market Segmentation by Channel - USD Bn eB2B Penetration (% of Overall B2B Retail, 2021) CAGR % China 10-15% Unorganized 10% 31 Bn** Offline UK 7-10% Organized Offline US 10 Bn, 32% 4-7% Online 19 Bn** Brazil 1-5% 3 Bn, 15%
Slide 35: Significant Continued Progress on Our Path to Profitability at Scale
Significant Continued Progress on Our Path to Profitability at Scale % Activation rate (As % of registered retailers) # Transacting Retailers Brand Listed (#) 69% 188 1,19,564 50% 165 45,030 Q1FY23 Q1FY24 Q1FY23 Q1FY24 Cities (#) Orders (‘000) 699 263.9 516 103.7 Q1FY23 Q1FY24 Q1FY23 Q1FY24 34
Slide 36: Benefits of Scale starting to flow through in both Cost & Efficiency Metrics
Benefits of Scale starting to flow through in both Cost & Efficiency Metrics Avg. GMV per Month BDE Productivity* 2.6x 1.8x x x Q1FY23 Q1FY24 Q1FY23 Q1FY24 Fulfilment Cost/ Order S&D Cost/ Order x x 0.9x 0.7x Q1FY23 Q1FY24 Q1FY23 Q1FY24 35 * BDE productivity is calculated basis GMV generated per BDE
Slide 37: What does Scale mean for Us?
What does Scale mean for Us? Avg. GMV per Month BDE Productivity* 18x 3x x x FY23 At Scale FY23 At Scale # Orders Brands Listed 2x 13x x x FY23 At Scale FY23 At Scale Better Path to Profitability at Scale, due to Higher Margins 12-15% 2-3% 5-7% ~5-6% 5-6% 3-5% Current Industry GM % Monetisation Fulf
Slide 38: Technology creating a differentiation for General Trade
Technology creating a differentiation for General Trade Personalized Location based Check-in Recommendation Personalized recommendation to Uplifting BDE productivity with improve the cart building and size efficient location based check-in 37
Slide 39: Financial review
Content and Technology and Beauty and Personal Fashion Marketing Supply Chain Financial review
Slide 40: Driving consistent growth
Driving consistent growth All Values in Rs million % YoY Growth % Margin % to Revenue from Operations Revenue from Operations Gross Profit 44.4% 43.5% 24% 21% 14,218 11,484 6,186 5,099 Q1FY23 Q1FY24 Q1FY23 Q1FY24 EBITDA PBT 4.0% 5.2% 0.7% 0.7% 60% 17% 735 97 83 461 Q1FY23 Q1FY24 Q1FY23 Q1FY24 39
Slide 41: Focus on cost improvements
Focus on cost improvements bps YoY Change Total Operating Expense** Fulfilment Expense* 205 bps 172 bps 40.4% 38.3% 11.3% 9.5% Q1FY23 Q1FY24 Q1FY23 Q1FY24 Marketing Expense* Employee Expense* 111 bps 24 bps 12.3% 11.2% 10.0% 9.7% Q1FY23 Q1FY24 Q1FY23 Q1FY24 * As % of Revenue from Operations 40 ** To
Slide 42: Q1 FY24: Improvement in operating profitability
Q1 FY24: Improvement in operating profitability Gross margin impacted due to increase in mix of 111 bps -57 bps 24 bps -47 bps eB2B: Superstore 5.2% 172 bps 4.0% -89 bps Fulfilment expense improvement driven by regionalization strategy (reduced air shipment ratio & freight cost per order) along with
Slide 43: Q1 FY24: Consistent retail expansion, deployment of working capital
Q1 FY24: Consistent retail expansion, deployment of working capital Depreciation and lease cost increased YoY on 5.2% -365 bps account of incremental capex investment in FY23 in retail stores, warehouses and offices Interest - Financing increased YoY on account of incremental bank borrowings in line
Slide 44: Vertical Performance: Business Wise
Vertical Performance: Business Wise (All amounts in ₹ million, unless otherwise stated) Q1 FY24 Q1 FY23 Particulars BPC Fashion Others Total BPC Fashion Others Total GMV 18,508 6,537 1,633 26,678 14,888 5,820 850 21,558 Growth 24% 12% 92% 24% 39% 59% 153% 47% NSV 11,298 1,977 930 14,205 9,199 1,733
Slide 45: Profit & Loss Statement
Profit & Loss Statement (All amounts in ₹ million, unless otherwise stated) Quarter Ended Year Ended Particulars Jun-23 Jun-22 YoY Growth Mar-23 QoQ Growth Mar-23 Mar-22 YoY Growth Revenue from Operations 14,218 11,484 24% 13,017 9% 51,438 37,739 36% Cost of goods Sold 8,032 6,385 26% 7,259 11% 28,6
Slide 46: Dot & Key
Dot & Key 45
Slide 47: Joy of Expert Skincare
Joy of Expert Skincare 46
Slide 48: About the Brand
About the Brand “ New age skin care D2C skincare brand addressing every skin concern with expert skincare products while making the experience fun and joyful ” Key Categories Moisturizer & Face Washes & Lip Balms & Serums Sunscreen Masks & Peels Toners & Mists Night Creams Cleansers Masks Curated of
Slide 49: Our Journey
Our Journey 2018 2019-2020 2021 2022 2023 • Brand Launch • Launched several • Acquisition by • Creation of • Annualized GMV • Positioning: innovative products Nykaa (51% stake comprehensive run rate of ~Rs 3 Indulgent Joyful like AHA peels & owned by Nykaa) portfolio Bn* skincare Clay masks • Strate
Slide 50: 'Right To Win' – Focus on Product Development
‘Right To Win’ – Focus on Product Development New format and future thinking International Trends Identifying needs of market and providing new format and new Identification of International product ahead of time and trends and speed to market. getting first mover advantage Consumer is everything Ri
Slide 51: Strategic initiatives & Growth Drivers
Strategic initiatives & Growth Drivers Strategic initiatives Growth Drivers Strong innovation Storytelling via Strengthening category funnel marketing depth and market share across key platforms While core categories have strong Crafting strong & unique ingredient growth momentum, New launches story
Slide 52: Glossary
Glossary Term Description Unique customers identified by their email-id or mobile number who have placed at least one Order on our websites, mobile applications or physical stores during the last 12 months ended as on measurement date. Annual Unique Transacting Customers Annual Transacting Customers
Slide 53: Thank you
Thank you 52
Slide 54: Key Operational Metrics
Key Operational Metrics Quarter Quarter Ended Year Ended Ended Jun-23 YoY Metric Unit Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 YoY FY22 FY23 Growth growth Number of Visits Beauty and Personal Care Million 205 211 221 204 222 234 250 231 257 16% 841 937 11% Fashion Million 98 11
FSN E-Commerce Ventures — Q1 FY24 Earnings Presentation on 6ix