D-MARKET Elektronik Hizmetler ve Ticaret AS Q4 FY2023 earnings call

Key Points

• GMV more than doubled in 2023, with 3.9 billion visits to the platform. Consumers trusted Hepsiburada for appliances, electronics, etc. For example, one out of every two dishwashers and washing machines, and two out of every five laptops sold online were via Hepsiburada.
• HepsiJet, the logistics company, delivered 67% of parcels on the platform, with 82% next day delivery for retail orders. Its third-party volume increased 1.6 times in 2023.
• Hepsipay's wallet base rose to 15 million by mid-March 2024, with BNPL used by nearly 330,000 customers by end of Q4 2023. HepsiFinance, the consumer financing company, was launched.
• The company achieved a substantial EBITDA turnaround with a full-year gross contribution margin of 10.6% and disciplined OpEx management.

In 2023, Hepsiburada's GMV grew by 104% year-on-year. Marketplace operations accounted for two-thirds of the business. Revenue grew by 34%, with retail and marketplace operations contributing, delivery service revenues increasing by 48%, and other revenues (including advertising, co-marketing, and loyalty) surging by 125%. Unadjusted gross contribution margin was 10.6%, with an adjusted-for-inflation margin of 9.2%. EBITDA as a percentage of GMV was 1.8% unadjusted and 0.4% adjusted, showing a significant turnaround from previous years.

Forward-Looking Statements

• For the first quarter of 2024, Hepsiburada expects GMV growth of around 120% compared to the same period in 2023.
• At the EBITDA level, the company expects to deliver around 2% of GMV, adjusted for inflation.

Risks Discussed

• Inflationary environment pressuring consumer purchasing power.
• Macroeconomic uncertainty, including potential consumer slowdown in the second half of 2024 due to tight macroprudential policies.
• Competitive dynamics in the Turkish e-commerce market.

Q: How does the credit card spending in Turkey impact Hepsiburada's GMV guidance for the first quarter?

A: Hepsiburada estimates 120% GMV growth for Q1 2024 vs Q1 2023 due to a lower base from the earthquake in 2023. While credit card spending in the market is higher, there may be some upside but not significant.

Q: What about take rates and competitive dynamics in Turkey?

A: Hepsiburada's gross contribution margin improved by 270 basis points in 2023. They aim to continue finding optimal take rates to grow the business while optimizing profitability. In Turkey, Hepsiburada differentiates with its widest affordability solutions, strong logistics network, and high NPS, positioning them to remain competitive.