ShopUp experienced a revenue increase of 55 per cent for the financial year ending in June 2023, achieving US$129 million compared to $83 million in the financial year ending June 2023. This growth was driven by strong demand in key categories, including FMCG products and daily essentials such as sugar, rice, and oil.
ShopUps extensive delivery network and strong fulfillment infrastructure were pivotal in this success, reaching over 31 million people in Bangladesh through its network of small shops.
A significant factor contributing to this growth was ShopUps strategy of forming direct partnerships with leading brands and manufacturers.
This approach ensured consistent distribution through an expanding network of micro-fulfillment hubs, which grew by more than 20 per cent in 2023, totaling 427 hubs across the country.
Despite the increase in revenue, ShopUp faced higher costs, primarily due to increased sales expenses. However, the company implemented several cost-management initiatives.
These included leveraging scale to negotiate better terms with suppliers, developing in-house supply chain technology to minimize waste, and optimizing inventory management. These strategies helped reduce the cost of sales as a percentage of revenue by 4.5 per cent year-over-year.
ShopUp incurred a loss of $49 million for FY 2023, but excluding ESOP expenses, the actual losses decreased by 17 per cent compared to the previous year.
A significant milestone was achieved in December 2023 when the company turned EBITDA positive, marking a crucial step toward profitability.
ShopUps strategy focuses on long-term sustainability, with ongoing investments in its platform, technology, and workforce.
Looking ahead, ShopUp aims to build on this momentum and achieve full-year profitability next year, targeting PAT profitability.
The company plans to expand its distribution hub network to 700 by December 2025, further enhancing market penetration across various product categories.
With a strong cash position of $69.5 million, ShopUp is strategically positioned to build the largest commerce model for emerging markets.
The company is exploring expansion into the Gulf region, leveraging its successful model to tap into these fast-growing markets.
This expansion is set to unlock new geographies, fostering growth and better serving the needs of emerging markets.
With a solid foundation in place, ShopUp is well-equipped to sustain its growth trajectory, expand its market reach, and achieve long-term profitability.
As the company evolves its business model and explores new markets, it aims to enable economic growth and promote financial inclusion in emerging markets.
