Falabella's successful first 2021 quarter
What: The Chilean conglomerate reported a profit of USD 137.3 million in the first quarter of 2021, with the online business as the main growth driver.
Why is it important: Experts believe the trend will continue over the coming months, but warn that the company will have to face increasing competition.
The Chilean department store company reported a first quarter with a 10.7% increase in revenue compared to the same period last year, reaching USD 2,479.2 million. Its earnings soared 713.8% (from USD 23.2 million in the first quarter of 2020 to USD 137.3 million in this period). The high profits were mainly driven by its e-commerce platform. The GMV (Gross Merchandise Volume) reached USD 805 million during the first quarter, an increase of 142% annually.
Chile is the market where Falabella had the best results in this quarter. The retail business experienced a strong growth in the country of 28%, mainly thanks to the home improvement segment. Peru and Colombia, although their consolidated revenues reported a drop of 3.5% and 7.3%, respectively, also showed to be growing markets for Falabella. In Brazil and Argentina, revenue decreased 1.1% and 25.5% during the first quarter compared to the same period in 2020.
The supermarket online business experienced GMV's highest year-on-year growth at 244%. Its department store and marketplace businesses also grew 149% and 122%, respectively.
The pandemic has accelerated the penetration of online consumption across all segments.
The other segment of the Chilean group that contributed to the growth of its profit was the results of Banco Falabella. In the first period of the year, Banco Falabella Chile reported an increase in its profits of 111.3% annually.
Local experts highlight the company's effort to unite its different brands - the marketplace, retail business, home improvement, supermarkets and Linio - in a single platform, Falabella.com. They also consider that the company could experience a slight slowdown towards the end of the year, especially in the online channel. The analysts also believe that the company is facing new competitors that previously did not have a large presence in the market. For example, it mentions Falabella's own retail business suppliers, such as food, personal care, beauty, pharmaceutical, electronics. The main competition of Falabella will no longer be Ripley or Cencosud, but Mercado Libre and very soon Amazon and surely Rappi, Cornershop and Uber.