Ozon IPO: What Investors Should Know About The Amazon Of Russia

Russia is the 11th largest economy in the world with a GDP of $1.7 trillion. The country has the highest GDP per capita of the BRIC countries. Russia’s population of 147 million ranks ninth in the world.

Ozon could be set to capitalize on a country that ranks first in Europe and seventh in the world for the most internet users. Russia has 113 million internet users, which is 83% market penetration.

The top 10 online and offline retailers made up 25% of total retail sales in Russia for 2019, compared to countries like the United States, Germany, and United Kingdom where the top 10 made up 35%, 40%, and 42%, respectively.

Other eCommerce players in Russia are Wildberries, Yandex YNDX, and a joint venture between Mail.ru and Alibaba Group Holding BABA.

Financials: Ozon saw gross merchandise value increase 93% year-over-year in 2019. GMV increased 142% year-over-year for the first nine months in 2020.

The 142% increase in GMV for 2020 grew three times faster than the overall e-commerce market for Russia.

Revenue grew from 37.2 million Russian Rubles in 2018 to 60.1 million in 2019. The first nine months of 2020 saw the company hit 66.6 million Russia Rubles compared to 39.2 million in the prior year’s comparative period.

Plans for Growth: Ozon launched financial products and services for buyers and sellers, which added to its services offered. The company also added advertising and logistics services to sellers.

The company’s Ozon branded debit card has had 260,000 cards activated as of Sept. 30.

Growth strategies include enhancing buyer loyalties, expanding logistics regionally, and building a diversified ecosystem of complementary services, like the company’s financial and travel offerings.

Other Global E-Commerce Plays: Amazon.com AMZN has been one of the bigger success stories for early investors. Shares are up 1,700% over the last 10 years. Other global e-commerce plays have also seen large share gains in markets that are under-penetrated and growing.

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