Special Report: The company now plans to capitalise on its first-mover advantage by expanding across other major ecommerce platforms and into new Tech categories.

For pure-play ecommerce retailer Harris Technology (ASX:HT8), the stage is set for a big year in 2021 as the company consolidates its online marketplace advantage.

2020 marked a watershed year for Harris, which has a 30+ year history in tech distribution, as it repurposed the business to ecommerce and positioned itself to take advantage of the online revolution in the wake of the pandemic.

As Harris’ sales momentum increased so did the price of HT8 shares. from a low of 1.6c in April 2020 to above 20c at end of the year.

Recent data illustrates the strength of HT8’s marketplace business model, where the majority of its sales are generated through Amazon, eBay, Catch, Kogan and Mysale  marketplaces.

Whilst Amazon only launched in Australia three years ago, the global ecommerce giant has already reached sales of $1.2bn in 2020. Of that, their marketplace channel is estimated to generate sales of $500m, according to industry website marketplacepulse.com.

As the leading Amazon Marketplace Tech seller, HT8 booked sales of $15.656m through its Amazon channel in 2020, making up three per cent of third-party sales on the platform.

In reflecting on the 2020 marketplace sales developments, www.marketplacepulse.com described 2020 as:

“The best year for ecommerce marketplaces in over a decade. Ecommerce growth had a step change, and marketplaces captured most of it. In aggregate, it was the most successful year for sellers and brands that transact through them, too.”

 

First-mover advantage

Speaking with Stockhead, HT8 CEO Garrison Huang said:

“We made early investments in creating traction on the Amazon platform and have taken advantage of FBA (fulfilled by Amazon) which is efficient and cost effective for us.”

“Amazon takes care of packing and shipping, which is important as it provides us  a pathway for growth without needing to invest in expanding our own warehouse and  logistics capability.”

“We are the only ASX listed company focusing on this type of business, and we’re benefiting from the growth driven for us by the major online retailers off their marketplace platforms.”

2nd half 2020 sales rose to $9.47m, up 100% from the previous six months and again HT8 capitalised on its momentum in the 1st half 2021 as sales more than doubled again to $19.4.

Showing its nimbleness to take advantage of trends and shifts in opportunity, HT8 used its importing experience and business relationships to help deliver personal protective equipment (PPE) during the pandemic.

Huang highlighted that 90 per cent of the company’s sales were generated from its core Tech Electronic category, which is recording consistent exponential growth.

That growth was confirmed by HT8’s latest 4C filing, which showed triple-digit % growth in top-line sales and a pleasing cash flow positive quarter.

In the period between March and September 2020, HT8 booked a total of PPE sales of $2.5m. as demand rose in the wake of the pandemic.

The company’s record Q4 sales result of $9.57m was driven entirely from Tech Electronic products.

HT8’s focus is now on combining it’s tech expertise with its first-mover advantage in ecommerce marketplace channels.

“We are a tech retailer and have been around for a long time, so we certainly have strong relationships with suppliers and brand owners allowing us to take further advantage of our (marketplace) position and expand the categories such as Gaming and smart home,” Huang said.

And with record Q4 sales momentum carrying into the new year, the company clearly has runs on the board when it comes to executing on a unique ecommerce strategy.

 

This article was developed in collaboration with Harris Technology, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions