As the Russian e-commerce market keeps growing in spite of the economic crisis, Lamoda.ru, a major online fashion retailer operating in Russia Ukraine and Kazakhstan, saw its net revenues grow to €125.6 million in the first half of this year — up 41.1% on a constant currency basis (or 15.4% in euros) from H1 2015.
These figures were disclosed in the H1 2016 report of Global Fashion Group (GFG), the holding which controls Lamoda as well as several other online fashion retail sites Dafiti, Namshi and Zalora & The Iconic.
Lamoda, which was founded in 2011, is not profitable yet. According to the report, Lamoda’s adjusted EBITDA was negative at – €7.7 million in the first half of this year, but the losses have been significantly reduced over the past few years (- €42.3 million in 2014, – €34.4 million in 2015 full year).
GFG sees “significant progress on path-to-profit initiatives across fulfilment, marketing and overhead resulting in an improvement of 10.1 percentage points of adjusted EBITDA margin to (6.1%).”
On the operating side, Lamoda achieved “several key milestones to further automate warehouses and extend capacity to cater for anticipated order growth at reduced costs per shipped order.”
The e-commerce company also “significantly expanded offline customer contact footprint through several strategic partnerships.”
Lamoda’s results in H1 2016
Source: GFG
Generous funding from western investors and World Bank
Launched by German giant incubator Rocket Internet, Lamoda.ru raised considerable amounts from western investors in 2012 (around $60 million) and 2013 ($130 million). The company even attracted €10 million from IFC, an entity of the World Bank, in 2014, just before being merged into GFG in 2014.
The money essentially went to building an in-house logistics and delivery system, as the country’s existing infrastructure was considered to be too weak. Lamoda also fought hard and long on the marketing front to beat competitors such as Sapato.ru.
During the first half of this year, GFG secured €330 million in additional funding from its existing shareholders, including Kinnevik and Rocket Internet. “The funding round and divestments in India and South East Asia substantially strengthen GFG’s financial position,” states the group, which had a pro forma cash balance of €342.6 million per the end of H1 2016.
“The strong financial position will enable continued growth, investment in technology and logistics infrastructure across all the regional businesses,” GFG added.
