Ecommerce boom propels online homewares retailer MyDeal to the ASX
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In 2020 several stocks have benefited from the rapid uprising of the ecommerce boom in Australia, and the newest ASX aspirant says the run isn’t over yet.
In three weeks time, on October 22, household goods-focused ecommerce company MyDeal will make its debut on the ASX. It has raised $40m at $1 per share and has an indicative market capitalisation of $258.8m.
Several ecommerce ASX stocks benefited from the boom, both generalist retailers including Kogan (ASX:KGN) and Harris Technology (ASX:HT8) and specialist retailers such as Beacon Lighting (ASX:BLX).
Retailers with a focus on homeware products were one group that did well, with winners including Temple & Webster (ASX:TPW) and Adairs (ASX:ADH).
Even as a non-listed homewares retailer, MyDeal has been a beneficiary of the COVID-induced ecommerce boom as well.
It generated $103m in Gross Transaction Value in FY20, 164 per cent more than the year before and sold more than 1 million products.
But MyDeal thinks the growth of ecommerce is far from over and wants a slice of the pie.
CEO Sean Senvirtne said the shift to ecommerce was already underway prior to COVID-19, but the pandemic had accelerated it.
“We think five to 10-year growth happened over a period of six months and to date we are seeing sales momentum continuing [to grow],” he told Stockhead.
“In our platform right now we have over 5 million products across 2000 categories.
“Obviously due to COVID, when people are at home, shopping centres are closed.
“You have the convenience of ordering online, getting delivered in two to three days and its products you know. Perhaps it’s an eye-opener for a lot of consumers it is easy, it is safe and it is fast.”
Senvirtne says MyDeal has 800 servers on its platform so it can cater for “very wide demand in the household furniture market”.
But Senvirtne believes the ecommerce market, particularly for furniture, in Australia is under-served compared to the US and the UK.
While Amazon has gradually risen in Australia he believes there’s still room for other competitors.
“We believe Australia as a country compared to the US and UK is highly under-penetrated when it comes to furniture and household goods,” Senvirtne said
“Over the years we’ve obviously seen that gap and that’s why we want to be the market place for household goods and establish ourselves.
“If you look at a business like Wayfair in the US, it has continued to grow and do really really well alongside the likes of Amazon (NDQ:AMZN).
“We think we are perfectly positioned to build [on] that household sentiment.”
After nearly a decade in business Senvirtne thinks it is the right time to list.
His company was entirely bootstrapped until 2017 when the Gandel Family invested $5m.
Senvirtne believes MyDeal now needs a fresh cash injection to go to the next level.
“We believe this is the right time to do an IPO, to get that extra capital, to build our branding, acquire the right talent and increase the overall awareness or exposure of the business,” he said.
“Some of our similar peers are doing well in the listed market and also when the next opportunity arrives, we’d like to be there with a very strong balance sheet to take advantage of the opportunities.”