X5 Retail Group has completed the process of separating online businesses into a separate structure, which it announced a year ago. The X5 Digital business unit will be headed by Larisa Romanovskaya, who previously worked at the Vkusvill network, where she held the post of e-commerce manager.
The new structure will manage X5 services in the e-grocery segment – a technological platform for express delivery, the infrastructure of small dark stores that provide delivery within 40 minutes of the assortment of Pyaterochka and Perekrestok, as well as the infrastructure of large dark stores with an expanded assortment under the Vprok.ru brand , says X5.
This business will continue to develop within the company’s perimeter (earlier, X5 considered the possibility of an IPO of an online business, private placement, and attraction of a strategic investor).
„While separating the online divisions into a unified structure, we discussed various scenarios for the development of X5’s online businesses, both independently and with the involvement of partners actively growing in related areas of e-commerce. In particular, we analyzed the possibility of monetization through a partial sale and the creation of additional shareholder value As a result, a decision was made to retain X5 Digital in the structure of X5,” said Vladimir Salakhutdinov, director of strategy and business development at X5 (his words are quoted in the message).
As a result, X5 will maintain the maximum flexibility and speed of development of online businesses in the current market conditions. „The effectiveness of the online economic model provides new opportunities for growth, while the model of monetization through market capitalization in the market at the moment, in our opinion, is unpromising,” Salakhutdinov said.
The retailer plans to start working with external sales channels, including connecting delivery aggregators (with the help of partners, the Magnit retailer, the closest competitor of X5, began to develop its online services).
X5 is the largest retailer in Russia by revenue. X5’s revenue in the II quarter increased by 18.6%, to 647.28 billion rubles, including offline sales – by 18.2%, to 632.57 billion rubles. Revenue of digital businesses increased by 38.4%, to 14.711 billion rubles (growth slowed down from 79.9% in the first quarter). In addition to express delivery services from Pyaterochka convenience stores and Perekrestok supermarkets, the Vprok.ru Perekrestok online hypermarket, X5 digital businesses include the Many Salmon ready-to-eat food delivery service and the 5Post last mile delivery service. .
GMV of express delivery services and online hypermarket in April-June increased by 34.1% yoy to RUB 15.9 billion (including VAT, promo codes and bonuses). Growth slowed down from 77% in the previous quarter.
In April, on peak days, the number of orders in the online hypermarket and express delivery reached 100,000.
As of the end of June, the express delivery service was available from 1,718 thousand stores (1,007 Pyaterochka stores, 711 Perekrestok supermarkets) and 45 dark stores in 54 regions. The online hypermarket „Vprok.ru Perekrestok” is represented on the territory of 82 constituent entities of the Russian Federation, in 8 of which it operates in the courier delivery format, in 74 – in the pickup format.