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MAGNIT PJSC (MGNT)
Magnit and Wildberries launch express delivery partnership
26-Jul-2021 / 11:00 MSK
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
MAGNIT AND WILDBERRIES LAUNCH EXPRESS DELIVERY PARTNERSHIP
Krasnodar, Russia (July 26, 2021): Magnit PJSC (MOEX and LSE: MGNT; the Company, Magnit), one of Russia's leading retailers, has today announced the launch of its collaboration with Wildberries, the largest[1] online retailer in Russia. The two companies have launched a pilot for express delivery of products from Magnit's convenience stores in Krasnodar. The partnership enables Magnit to offer its assortment via the country's largest marketplace and gives Wildberries the opportunity to bring its express grocery delivery service to a new region.
Customers can choose from more than 5,000 Magnit products, place an order, and pay for delivery via Wildberries's mobile app or website. Free delivery is available starting from RUB 499. At the start of the project, orders will be delivered within 90 minutes. Going forward, delivery time will be prompted to one hour.
Magnit's product proposition is presented in a separate "shop-in-shop" section, with order picking and delivery handled by Magnit with the help of a courier services partner. The broad range of products available for order include dry foods, dairy and meat products, packaged fruits and vegetables, ready-to-cook products, drinks including tea, coffee, juices, and bottled water, as well popular home, personal care, and pet products.
The partners plan to analyse customer feedback during the Krasnodar pilot before confirming the roll out of the project into other regions.
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Jan Dunning
President and CEO of Magnit
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"The collaboration with Wildberries enables us to further progress our e-commerce capabilities, attract new customers, improve customer loyalty, and increase the frequency of customer engagement with Magnit. The marketplace is one of the most dynamically developing business models within e-commerce, so it's important for us to be a part of this segment. The Krasnodar pilot will allow us to align our business processes and technologies and, if customers respond favorably, to roll the project out to a wider geography."
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Tatiana Bakalchuk
Founder, CEO of Wildberries
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"Wildberries is actively developing its express food delivery service. It's been operating in Moscow since May, and now, in July, we've also launched it in Krasnodar. For us, Krasnodar region is one of the key geographies, ranking among the leaders in number of customers and seller sales volumes. Similar to our partners in Magnit, we also actively cooperate with local suppliers. Thanks to our collaboration, local producers-including a significant number of small farms-will be able to dramatically expand their audience via online retail."
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Magnit currently operates a number of online delivery projects, both independently and in cooperation with partners. At the end of Q1 2021, e-commerce services covered over 1,300 of the Company's stores in 58 regions and 94 cities, with around 60% of e-commerce revenue generated outside Moscow and St. Petersburg.
Magnit delivers up to 9,500 orders a day and throughout 2021 is continuing to expand its e-commerce operations by adding at least 1,500 convenience, drogerie and large-format stores in more than 50 regions across Russia. The current average ticket for orders made via the Magnit Delivery app is up to RUB 1,400, which is almost 3.8 times higher than in the convenience stores (RUB 372 in 1Q 2021).
Wildberries has been developing food delivery capabilities since 2018. At the moment, this is one of the most rapidly developing categories for the online retailer: in the first quarter of 2021, its turnover in Russia grew more than three times year-on-year, and almost four times in Krasnodar region in particular[2]. Today, Wildberries offers Russian customers a wide assortment of various products: baby food, specialized sports and healthy lifestyle nutrition, as well as the classic range of dry foods, canned products, drinks, confections, and many other items.
In May 2021, Wildberries launched express delivery of perishable and frozen foods in Moscow, expanding the service to include ready-to-eat meals from the capital's restaurants in July. Thanks to collaborations with new partners, including those operating in other Russian regions, the service will continue to actively increase its assortment and coverage.
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About Magnit
Public Joint Stock Company "Magnit" is one of Russia's leading retailers. Founded in 1994, the company is headquartered in the southern Russian city of Krasnodar. As of March 31, 2021, Magnit operated 39 distribution centers and 21,900 stores (15,098 convenience, 471 supermarkets and 6,331 drogerie stores) in 3,770 cities and towns throughout 7 federal regions of the Russian Federation.
In accordance with the audited IFRS 16 results for FY 2020, Magnit had revenues of RUB 1,553.8 billion and an EBITDA of RUB 178.2 billion. Magnit's local shares are traded on the Moscow Exchange (MOEX: MGNT) and its GDRs on the London Stock Exchange (LSE: MGNT) and it has a credit rating from Standard & Poor's of BB.
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About Wildberries[3]
Wildberries is the largest online retailer in Russia, first entering the market 16 years ago. The company operates in 15 countries: Russia, United States, Germany, France, Italy, Spain, Belarus, Kazakhstan, and others. In 2020, Wildberries grew its turnover by 96% to RUB 437.2 billion. According to data for July 2021, over 2 million orders are placed with Wildberries every day. The company has around 120 thousand pick-up points, both owned and partner-operated.
Wildberries's assortment spans 14 million SKUs from 130,000 Russian and foreign brands: apparel and footwear, accessories, beauty products, jewelry, groceries, books, and many others. Over 230 thousand companies and entrepreneurs (over 80% of which are small and medium-sized businesses) sell their products via Wildberries. Around 50% of products are produced in Russia.
For the last five years, Wildberries has been the largest online store in Russia in volume of online sales according to Data Insight, an analytics agency. Wildberries ranks among the top ten most visited Russian websites according to SimilarWeb. The company is ranked second in the list of the most expensive companies in the Russian segment of the Internet, published by Forbes.
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Forward-looking statements
This document contains or may contain forward-looking statements that may or may not prove accurate. For example, statements regarding expected sales growth rate and/or store openings are forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from what is expressed or implied by the statements. Any forward-looking statement is based on information available to Magnit as of the date of the statement. All written or oral forward-looking statements attributable to Magnit are qualified by this caution. Magnit does not undertake any obligation to update or revise any forward-looking statement to reflect any change in circumstances.
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[1] According to 2020 assessment by Data Insight
[2] According to Wildberries.
[3] According to Wildberries.
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