Pureplay retailer Mybottleshop preps for ASX listing
Pureplay online liquor retailer Mybottleshop has plans to list on the ASX within the next three years, according to the company’s managing director and founder, Steve Rider. The Sydney-based retailer has carved out a niche in the online alcohol market, carrying specialty and premium beer, wine and spirits not sold in traditional bottle shops.
Since launching in 2013, Mybottleshop has grown to nearly $5 million in annual sales, with over sixty per cent of transactions occurring on mobile devices. Now its sights are set on an IPO, with a number of projects underway to prepare for a float on the Australian stock exchange in the next three years.
These include an upgrade to the Magento e-commerce platform, integration with logistics partners, including Australia Post and StarTrack, integration with payment gateways, including PayPal, zipPay and Bitcoin, and the implementation of a barcode scanning solution in its Marrickville warehouse.
Mybottleshop aims to reach $10 million in turnover in the next two years, giving it an annual net profit of $1-1.5 million by the time of its IPO, which puts it in line with ASX listing requirements.
“The number one thing we’re looking for [with an IPO] is access to capital,” Rider said. “We’re growing very rapidly as a business, but we have a high cash burn due to the fact that we hold a lot of stock.”
With major players like Woolworths, which owns Dan Murphy’s, BWS, Cellarmasters and Langton’s, dominating the market and new players coming onto the scene, such as BoozeBud, the reincarnation of online beer-only retailer BeerBud, Mybottleshop has no shortage of competition.
According to a recent IBISWorld report, the number of online alcohol retailers in Australia has jumped 20 per cent over the past five years, driving up online sales at a compound annualised growth rate (CAGR) of 11 per cent. Online sales are expected to continue growing eight per cent CAGR over the next five years to FY 2020/21.
While per capita alcohol consumption has been falling in Australia for the past decade, the decline has largely hit the lower end of the market (traditional beer, ready-to-drink beverages and cask wine), while craft beers and other premium products are actually seeing growth. This trend has given Mybottleshop the confidence to go after the major player in the market.
“In the next two to three years, we want to take about 10 per cent off Dan Murphy’s online business,” Rider said.
Despite the fact that Dan Murphy’s parent company Woolworths has led the pack in online sales of beer, wine and spirits, with 18 per cent CAGR over the past five years, Rider believes this goal is “totally achievable. We’ve already taken two to three per cent in the last 24 months, starting from nothing,” he said.
But according to IBISWorld senior industry analyst Andrew Ledovskikh, Woolworths will continue to deliver a strong performance in online liquor sales, thanks to its wide range, large network of warehouses, ability to cross promote and steep marketing budget. “There’s room in the market for smaller players,” he said. “Ultimately it depends on their ability to sell their brand.”
In this respect, an IPO will be crucial for Mybottleshop, as it would give would the company the necessary capital to compete on a national stage, in terms of its advertising budget, and prove its services, Ledovskikh said.