3Q2021 vs 3Q2020 in numbers
*AOV = Average Order Value
**Conversion = The percentage of shop visitors who bought something
Important developments during 3Q
Solid positive development continued through 3Q: compared to 3Q2020, we improved substantially all the critical KPIs as seen in the table above. On the annual level to date we are however slightly behind our ambitious sales budget and our EBITDA is just a tad on the negative side. But as said before, the 4th quarter will define where we end up for the whole year, from that perspective we are still in line with our targets and expectations. But final results will be visible only at the end of December.
3rd quarter is a bit of an in-between quarter for e-commerce sales in China. It is the only quarter with no major national shopping festivals, so obviously good time to focus on improving operations based on 1H results, and especially getting ready for the 4th quarter, which is by far the busiest quarter of them all. Which means the 3rd quarter was actually very busy for us, so here we go with our main activities.
First of all, good news on the funding front! We secured 3 new loantainers from our shareholders. Loantainers have been an extremely important & useful source of funding for us especially during 2021 & rapid sales growth. A big thank you to those shareholders who have believed in us & provided critically needed funding.
We have also made progress with local banks in China: as our sales revenues have grown, so have the lending limits from the banks. This was a pleasant surprise and again has been critically important in reaching the targeted growth figures. These new increased credit limits will also be needed to secure successful 4Q.
And further good funding news from Finland: ATC agreed to increase the credit limit we have with them to cover the increased needs for 11.11. and 12.12. shopping festivals.
We made good progress with our own (design) production during Q3: first two products have now been approved by Moomin Characters and we are preparing for their mass production, ready to hit the markets for 11.11. and 12.12. festivals. Own products are an important part of our turnaround project as they will have positive impact on our sales margin.
As we all have seen in the news during the past year, the Chinese government has turned their attention towards the vast Chinese online market, working on more level playing field for all parties involved & finding ways to limit some of the players from becoming too dominant. Keeping this in mind, we also decided to extend our active shop operations to JD.com & TaoBao platforms. These should improve our overall reach and sales volumes for the rest of the year & beyond while ensuring Euroeat will be able to serve the Chinese consumers in case some platforms see any limitations to their activities.
As our operations as a whole have grown substantially from 2020, we decided to outsource many of the non-essential & laborious activities to carefully selected partners. Our own focus will remain in selling more, improving the profitability and finding new products & customers.
One exciting new development on the sales operations is the live streams (live sales shows) which we started to test earlier this year. During this 3rd quarter we have finally started to see results from them in terms of increased traffic. This is again promising for the critically important 4th quarter.
Looking ahead to the rest of 2021
4Q. The most important time of the year for any e-commerce player in China. As said in our earlier reviews, how well we meet our targets for the whole year will be determined by how well we execute 4Q. This is big and this is important.
Goes without saying our top priority is to get prepared for the 11.11. and 12.12. shopping festivals: piling up the warehouses to make sure we don’t run out of sellable items. All hands on deck for that.
Apart from ensuring the engine runs smoothly, we will focus on securing further funding to fuel the growth in 2022, finalizing the plans & budgets for the same and finalizing the new licensing agreement for Moomins.
