Q4 2022 D Market Elektronik Hizmetler ve Ticaret AS Earnings Call
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Speaker 2: Ladies and gentlemen, thank you for standing by. I'm Poppy, your course call operator. Welcome and thank you for joining the Hep C Burada conference call and live webcast to present and discuss the fourth quarter and full year 2022 financial results.
Speaker 2: All participants will be in a listen-only mode and the conference is being recorded. The presentation will be followed by a question and answer session.
Speaker 2: Should anyone need assistance during the conference call, you may signal an operator by pressing star and zero on your telephone.
Speaker 2: At this time, I would like to turn the conference over to Ms. Nilhan Onal, Gogchia Tekin, CEO , Mr. Korhan Oz, CFO , and Ms. Helene Celik-Bilek, Investor Relations Director. Ms. Celik-Bilek, you may now proceed.
Speaker 3: Thanks, operator. Thank you for joining us today for HPSI Brodah's fourth quarter and full year 2022 earnings call. I'm pleased to be joined on the call today by our CEO Neelhan Onalg of Chetikin and our CFO Karan Oz. The following discussion, including responses to your questions, reflects management views as of today's date only.
Speaker 3: We undertake no obligation to update or revise this information except as required by law. Certain statements made on today's call are forward-looking statements and actual results may differ materially from these forward-looking statements. Please refer to today's earnings release as well as the risk factors described in the Safe Harbor slide of today's call.
Speaker 3: today's supplemental slide deck, today's press release, the 6K, are Form 2NF filed with the SEC on May 2nd, 2022, and other SEC filings for informational factors that could cause actual results to differ materially from these four leaking statements.
Speaker 3: Also, we will reference certain non-IFRS measures during today's call. Please refer to the appendix of our supplemental slide deck as well as today's press release for a presentation of the most directly comparable IFRS measure and the relevant IFRS and non-IFRS reconciliations. As a reminder, a replay of this call will be available on our investor relations page.
Speaker 3: always been in my radar as the company that established and contributed greatly to the development of e-commerce industry in Turkey. I particularly appreciate its innovative and entrepreneurial spirit and I'm really excited to lead this company through the opportunities lying ahead.
Speaker 3: Before I joined Hepziboroda, I held multiple global and regional leadership positions in Fortune 500 companies, including Procter & Gamble, and my last 8 years was with Amazon.
Speaker 3: During my career, I established and led various businesses in numerous sectors, including electronics, insurance, fast-moving consumer goods, fashion, cargo and logistics.
Speaker 3: Having worked overseas for the past 16 years, I am delighted to be back home.
Speaker 3: Over the past three months, I have been rigorously working with the team to explore all our businesses, projects and opportunities.
Speaker 3: HEPP, the Burada has clearly made great progress in building a robust spin-up form business and phenomenal household brand in Turkey. It established one of the largest last-mile delivery services and took initial steps in field text steel noises.
Speaker 3: The fundamentals of our business is very strong and components are highly scalable.
Speaker 3: Indeed, these are tests from the basis of my strategic priorities for the next chapter in Habsur-Uradah. By executing on those, I am confident that the company will deliver sustainable and profitable growth going forward.
Speaker 3: I'll discuss our strategic priorities in detail later in this presentation. Now let me start off with our 2022 highlights.
Speaker 3: 2022 was a tough year of global and local challenges, particularly in macroeconomic arena.
Speaker 3: Continuously rising inflation in Turkey has curbed purchasing power, hence the consumer demand.
Speaker 3: Regardless, we have all performed both our GRME growth and our EBTAs as a percentage of GRME guidance.
Speaker 3: We achieved 81% year-over-year GRD growth on an unadjusted basis, which exceeded the average inflation rate of 72% during the year.
Speaker 3: Fixturing in the monthly inflation rate and our monthly performance, G&E growth adjusted for inflation month 4%.
Speaker 3: In 1972, GMD growth resulted from over 80 million orders, marking around 50% year-over-year growth.
Speaker 3: Continued G&E growth coupled with improvements in path to profitability were driven by our commitment to continue to optimize customer experience, our wide selection and range of affordability solutions.
Speaker 3: To this, we may also add our prudent marketing stance and measured customer discounts.
Speaker 3: Accordingly, on an unadjusted basis, we recorded a negative 2.1% EBTAs per percentage of GME. This was a 4.4% EBTY year-on-year improvement.
Speaker 4: In the fourth quarter, we recorded an EVTA of negative 7 million CI on a non-adjusted basis.
Speaker 4: This is almost reaching break-even level. Two highlights of Tivanti 2 that merit your attention are one, our market leadership in MPS, and second, the performance of our loyalty program despite its very early days. You may have heard from Tivani intro absentee hopefully how many people are hearing these events
Speaker 4: Having attained a score of 74 in MTS in 72, we now intend to raise the bar in terms of customer experience in this sector.
Speaker 4: Our paid loyalty program at Subrata Premium, which was launched in July , gained traction.
Speaker 4: reaching 615,000 customers by year end. We value this program given the higher engagement and order frequency of its members. Now I would like to give you an update on our performance on the customer front.
Speaker 4: In 2002, we gained over 900,000 additional active customers, raising our total base to 12.2 million.
Speaker 4: This customer growth performance resulted from 1. Our solid customer value proposition of a fast, reliable, frictionless experience. And 2. Availability of diverse affordability solutions. And 3. Performance in our performance marketing.
Speaker 4: Our own logistics services, HEP-CJET, plays a key role in our value proposition.
Speaker 4: helps to achieve an 83% next-day delivery ratio in our bumpy operations. This is an improvement on previous year's 79%
Speaker 4: Hestiget also handles return collection service from customer stores free of charge in 22. This corresponds to 56% of our total return. This was a clear extraction point for offline customers contributing to the development of e-commerce.
Speaker 4: certain events.
Speaker 4: Pay later campaigns with very satisfactory results. I'll elaborate more on how these solutions will be instrumental in our growth plans in upcoming slides.
Speaker 4: One of our strong customer retention tools is going to be the Hepziboradha Premium program. Its members enjoy access to a wide range of benefits that include free delivery, cash back subject to certain conditions plus free access to an on-demand streaming service among many others.
Speaker 4: and gamified lotteries contribute to this performance.
Speaker 4: Excluding this digital product, the frequency increase in 72 was from 4.7 to 5.5, which still has 16%.
Speaker 4: Despite their relatively small average order value, this digital product generates repeat interaction with participating customer segments, supporting our key strategy of retention.
Speaker 4: Our active merchant base rose by 33% to nearly 100,000 merchants at the end of the year. This increased the number of escapes to roughly 164 million with a secular rise in monelectronics.
Speaker 4: Our merchants welcome the comprehensive value proposition and the set of tools that ensure enhanced merchant lifecycle management. One new tool that ensures thought service for their customers is Hepziborad's My Business Partner mobile app.
Speaker 4: This app gives our merchants access to task service monitoring and campaign management tools and tutorials and an array of services at effective rates. Also, important for our marketplace business, we improve the average duration of onboarding from 9.8 days into 4.5 days.
Speaker 4: our newly launched TUNAN Heavy Bulky Delivery Company, Hetzler Jet X-Large.
Speaker 4: 30% to 40% of over-sized parcels in Cu4L.
Speaker 4: Hep C logistics which is fulfillment service of Hep C burrada for its merchants
Speaker 4: In the year 2023, we remain committed to being a dependable partner for our merchants as we continue to enhance their experience.
Speaker 4: Now we defined our core priorities that set us on a path to profitability and greater contribution to the digitalization of commerce in Turkey.
Speaker 4: First, central to this strategy is prioritizing customer base loyalty over the acquisition of font timers.
Speaker 4: Our loyalty program, Hep C Premium, will play a fundamental role in achieving this.
Speaker 4: Second, we aim to win through our sustainable strategic differentiators.
Speaker 4: We believe our best-in-class affordability solutions and high quality delivery service levels position us favorably in Turkish markets.
Speaker 4: Third, we will promote profitability through a prioritized focus on core commerce.
Speaker 4: through focusing on sales of non-electronic categories. While doing so, we'll pursue a frugal approach and we already initiated a very robust review of all cost answers across all the groups.
Speaker 4: Fourth, we will externalize our best-in-class payment services, landing solutions, and our last mile delivery services.
Speaker 4: to other online retailers. We see great potential for Hepatopoeia and Hepatopoeia to leverage their assets and increase their contribution to our group. Let me now elaborate further on each of these points.
Speaker 4: To start with loyalty, we intend to capture the full business potential of our program to strengthen our customer retention.
Speaker 4: It's encouraging to see that we currently have already 840,000 members by mid-March. Our aim is to expand the space significantly during Cervantes 3.
Speaker 4: Hestiborada Premium Membership is a great value for our customers. Premium members tend to shop more often. Our data in December indicates that Premium customers' monthly order frequency is 1.7 times of the frequency they generate before joining this program.
Speaker 4: It's worth to say that we'll obviously seek to continue growing our customer base all by through their prudent investment.
Speaker 4: Focusing on retention, on the other hand, will help us reduce and optimize our marketing and advertising stuff.
Speaker 4: We strive to provide our customers with best value through our affordability solutions and superior delivery services.
Speaker 4: Our solutions enable us to set us apart from competition while demonstrating our commitment to our customers' satisfaction.
Speaker 4: We have capabilities such as payments with multiple credit cards, payments in installments and instant shopping laws. EnVyar are the only e-commerce players holding a payment services license to offer buy now, pay later service. That's critical for Turkey.
Speaker 4: While we have been highly cautious with the roll out of this service in terms of the limits offered, the demand so far is encouraging. I'll elaborate on this more in the upcoming slides. Our Women's Discovery Network spans across 81 cities in Turkey.
Speaker 4: this 2,400 carrier is another distinct differentiation point for us. This level of penetration extends to our XLAR services in addition to standard delivery.
Speaker 4: I will talk more about our logistics network too, but let me first celebrate on payment services on the next two slides. During Cilanti 2, Hestipay has continued its penetration reaching 11 million wallets by the end of the year.
Speaker 4: In Q4, the GMD penetration of those with the H2P wallet reached 84%, up from 66% during the same period last year.
Speaker 4: Meanwhile, Hepatate's newly launched PNPL solution was used by over 150,000 customers.
Speaker 4: We continue to diligently manage this solution's credit risk while maintaining focus on its growth.
Speaker 4: while increasing our affordability solutions will grow mainly through using partner banks balance sheets.
Speaker 4: including the MTS, total non-hard affordability solution shares in total GMV reached 3.9% in 2472.
Speaker 4: With an expanding affordability solution set, we intend to remain relevant for our customers going forward in what we expect to be a tough economic environment.
Speaker 4: We target to double non-card affordability solutions shared in GMB Cilancis rate. This is also an important factor in reducing our credit card expense which we estimate to be down by roughly 6% EUR in Cilancis rate.
Speaker 4: 2022 was a significant year of key milestones on Hephzibet. In the fourth quarter, Hephzibet wallet was redesigned and relaunched with new features enriching the shopping experience with improved customer satisfaction and evolved capabilities.
Speaker 4: HPCA users can now pop up their wallets by transferring money from their bank accounts in addition to existing ability to transfer money from credit or debit cards. Furthermore, during the year, HPCA came closer to becoming a payment gateway by consolidating payment options on the reproduction of experience for our HPCA users.
Speaker 4: platform by leading banks. To externalize our services, we aim to launch one-click check-offs, integration with merchants, targeting online retail, as well as store payments and prepaid cards.
Speaker 4: In the meantime, we aim to capture the share of the merchant acquiring market with enhanced payment services provider infrastructure. By delivering on this plan, our goal is to become leading fintech players in Turkish financial sector.
Speaker 4: Now I want to come back to our logistics services. HEDS-BJIT's operational footprint comprised seven strategically located fulfillment centers, 18 trans-star hubs, and a network of over 190 cross-docs. We are covering 205,000 square meters.
Speaker 4: In Cement2, Hep CGS delivers 65% of Hep CGS brother parcels overall, up from 50% in Cement1.
Speaker 4: Our X-large arm delivered 47% of Hesti Burada's oversized parcels during the year. HestiJet continues to introduce new capabilities that build on customer convenience. Among these is the ability to lift, track parcels prior to delivery.
Speaker 4: HEP-SUGET achieved an MPS of 87.9 with its service quality, which contributed to our leading MPS at S
Speaker 4: As we grow, we intend to promote profitability through a very prioritized focus.
Speaker 4: We aim to increase our wallet share by focusing on sales of non-electronic categories and more through our marketplace. We will step back from any dilutive businesses as we analyse their contribution to our performance. We believe there are several processes and actions that can be automated.
Speaker 4: which is vital to connect with our merchant base.
Speaker 4: As highlights, we see great potential for JetN Pay to leverage their assets and increase their contribution to our group.
Speaker 4: As we continue to improve the service quality of JET and expand the solution portfolio of JET, we will gain new customers off platform by promoting these high quality services.
Speaker 4: Externalizing these services is expected to facilitate economies of scale, improved operational efficiency, as well as establishing market share in respective businesses, and most importantly, contributing to the digitization of e-commerce in Turkey.
Speaker 4: SBA executives will remain capable of taking any required action in response to macroeconomic volatility or change in market conditions.
Speaker 4: I don't want to repeat myself, but let me summarize one more time. Our building blocks on path to profitability, one optimization of marketing with a focus on customer loyalty, second one focusing on affordability solutions,
Speaker 4: and service on our platform. Third one is improving our cost center and gross contribution and final very importantly have to get and have to pay off platform revenue.
Speaker 4: By executing on these priorities, we expect to deliver a further sustainable growth, drive, margin improvement and remain committed to becoming a profitable company.
Speaker 4: Before I continue discussing the outlook, we must acknowledge the disaster that struck Turkey in February .
Speaker 4: Two devastating earthquakes impacted 11 cities and the lives of around 14 million people directly. Once again, I want to express my heartfelt condolences to all the victims.
Speaker 4: Our sincere hopes are for the earliest possible relief and recuperation for all affected areas and individuals. As HEPs brought our families, we are fully committed to offering full support to the region to heal together.
Speaker 4: We are grateful that none of our colleagues have lost their lives in this disaster. Of our SS, 8 HEPs of RADA cross-talk points out of a total network of 192 were damaged. We plan to renovate and return to them.
Speaker 4: operations to isolate as fast as possible. Also as mentioned, we observed a temporary decline in overall customer demand on our platform in the wake of the disaster as one would expect.
Speaker 4: The number of orders, particularly during the week of February 6th, is compared to previous week and the same week of last year.
Speaker 4: This decline likely resulted from the considerable loss of traffic and demand from the affected region, and our decision to suspend major campaign events and media advertising for two weeks to honor the nation's mourning.
Speaker 4: By mid-March, platform traffic had gradually recovered to almost pre-earthquake levels. The order trend during this period was relatively low last time, which had also recovered and almost reached to pre-earthquake levels.
Speaker 4: As quickly as possible, following the earthquake, Habsburg has taken service to recovery measures.
Speaker 4: including the sale of aid goods, prepaid cards, facilitating public donations, as well as managing warehouses and logistic capabilities with our own resources to support government aid efforts. And we also make in-kind donations from our inventory.
Speaker 4: With the well-being of our 6,500 merchants in mind, we twice advanced outstanding payments by a week in February . As of today, 1,270 merchants stored on our platform are temporarily closed at their own request.
Speaker 4: To support our merchants, we wait commissions for those who meet certain set criteria until the end of March.
Speaker 4: From a profound sense of responsibility to our wider society, we just initiated a two-year program to provide long-term assistance and economic support for the region.
Speaker 4: The program supports small and medium-sized enterprises, merchants, women entrepreneurs, women cooperatives, while boosting the region's e-commerce and logistics capacity.
Speaker 4: We'll be shifting employment, enhancing services and activities to the region, and providing educational and social support to children and families. Our program aims to boost regional GM regeneration of a total of 10 billion Nira during this period.
Speaker 4: Finally, I would like to give Q1 to Landscaping Outlook.
Speaker 4: Going forward, we will remain focused on sustainable GMD growth and profitability with a prudent approach to capital allocation. To this end, despite the earthquake disaster, we expect to deliver an adjusted EBITDA breakeven in the first quarter of 2020-2023.
Speaker 4: Under peeling this performance, we also expect GND growth around 70% in Q1, compared to Q1, ASX about to thought.
Speaker 4: This is expected to be above inflation considering the 12-month inflation rate of 55% as of February 2023. With this, I thank you sincerely for listening and leave the floor to our CFO partners to give more.
Speaker 5: In the example of forward planning as well as attractive value proposition, we excel across three metrics in the fourth quarter despite the high inflation climate.
Speaker 5: On adjustment for inflation, RGND growth was 104% in the fourth quarter compared to Q4 2021.
Speaker 5: Adjusted for inflation, our GNV rose by 14%, bringing the full-year GNV growth to around 4%.
Speaker 5: With 10% revenue growth in Q4 2022, our growth contribution margin was 7.8%, marking a 2.5% year-on-year improvement adjusted for inflation.
Speaker 5: By a solid 8.4 percentage point year-on-year improvement in EBTAs, as a percentage of GND, we delivered negative 1.3% adjusted for inflation. I must highlight here that we came very close to quarter liberative level with only negative 7 million Turkish Lira EBTAs.
Speaker 5: progress on our path to profitability in Q4 2022 as well.
Speaker 5: While our gross contribution margin was 0.6 percentage point lower compared to the third quarter, given this is NASA factor, our EDA margin improved by 4.6 percentage point on a quarter over quarter basis.
Speaker 5: This performance underpins our commitment to becoming a profitable company. On the next slide, let's look into details of our GLE performance.
Speaker 5: Adjusted for inflation, our GMV grew by 4% compared to 2021. This was attributable to 50% order growth fueled by our solid active customer base and continued rising our order frequency. The share of marketplace in 2022 but...
Speaker 5: The share of non-electronics in the GMB rose 2 percentage points to 42 percent in 2022 compared to 2021 as a result of expanding our selection with long-tail products. Let's look into the performance on the next slide.
Speaker 5: as a percent of the our is29 unadjusted revenue grew by 86% in 2022 compared to 2021. Taking into consideration the average inflation rate of 72% in 2022
Speaker 5: With a 2.7% 0.0 year improvement in EBTAs as a percentage of GLE, we achieved a negative 4.8%. We achieved a negative 4.8% increase in GLE in EBTAs as a percentage of GLE.
Speaker 5: On adjusted for inflation, the improvement was 4.4 percentage points to negative 2.1 percent in 2022. As a result, we beat the high end of our guidance of negative 2.5 percent by 0.4 percentage points.
Speaker 5: Next slide, please. Let's take a deep dive into our revenue performance. Around 7% revenue growth was achieved mainly by around 41% growth in our marketplace revenue, 3% increase in one piece revenue, and 86% increase in our...
Speaker 5: Other revenue that includes advertising and fulfillment service revenue streams, as well as our third party delivery service revenue. Given 4% GMB growth during this period, a significant revenue growth was achieved on the back of strategic decisions to focus on improving profitability by limiting customer discounts during the year.
Speaker 5: The 1.1 percentage point shift in GLE mix in 2022 in favor of 1P also impacted Germany's growth positively. Our growth contribution margin in 2022 increased by 0.2 percentage point to 6.5 percent compared to the previous year.
Speaker 5: That is the improvement of nearly two percentage points in IS29 on adjusted figures.
Speaker 5: The main reason behind the divergence is the high level of inflation during the year, pressuring on margins through our retail operations. Next slide, please. In 2022, a 2.1% decline in net operating expenses as a percentage of GLB
Speaker 5: in cost-effective channels, as well as category-specific optimizations, supported overall marketing spend efficiency.
Speaker 5: 0.7% point decrease in shipping and packing expenses driven by the reduction in shipping expenses of our Heptabroda Market business following changes to its operating model.
Speaker 5: This improvement was partially offset by an increase in unit shipping charges in line with inflation. In addition, the growth rate of shipping and packing expenses was slower compared to 2021, as the share of HEPs jet in total delivery volume increased.
Speaker 5: 0.9 percentage point increase in our G&A expenses, mainly due to a higher legal provision expense in 2022 compared to last year.
Speaker 5: This increase can also be attributed to rising the number of employees in 2022, along with the impact of annual and mid-year salary increases and share-based payment expenses. Let's move to the EBCA margin on the next slide.
Speaker 5: Our EBTI in 2022 was negative 2.6 billion GL, corresponding to a negative 4.8% EBTI as a percentage of GLD in 2022, indicating a 2.4% 0-year improvement.
Speaker 5: This was delivered by the improvement in our gross contribution margin, lower advertising expense and lower shipping and packing expenses partially offset by higher employee expenses and other operating expenses.
Speaker 5: In Q4 2022, EBT-A as a percentage of GMB was negative 1.3% with an 8.4% year-on-year improvement.
Speaker 5: Next, I would like to say a few words on our cash flow dynamics. In the fourth quarter, net cash provided by operating activities was 1.3 billion TL, mainly due to decrease in the change in net working capital and increase in change in inventory.
Speaker 5: For the full year, the 415 million increase in net cash provided by operating activities is a result of increase in change in inventory. We continue to operate with negative networking capital during 2022. The change in net working capital in Q4 was 1.2 billion dollars.
Speaker 5: This was due to positive cash generation from our operating activities, a combined result of better working capital management and significantly improved EBTAs. For the full year 2022, our free cash flow was near the flat at a negative 416 million geometric value of 1. Muhammad Al Aba, chef and web disruptor at bridge housing programs. Liste reimbursable frogs back in the. In the Caribbean. There's a lot of.
Speaker 5: A larger textiles pool and a new cellular payload near the two-fold capex zero rear.
Speaker 5: This was met by higher cash provided by operating activities. This concludes our presentation. Thanks for listening. We can now open the line for questions.
Speaker 2: Ladies and gentlemen, at this time we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their telephone. If you wish to remove yourself from the question queue, then you may press star and two.
Speaker 2: Please use your handset when asking your question for better quality. Anyone who has a question may press star and 1 at this time. One moment for the first question, please.
Speaker 2: The first question comes from the line of Kilikiran Hansade with JP Morgan. Please go ahead.
Speaker 5: Thank you very much for your presentation and congratulations on your new post. I just want to make a follow-up about your guidance for 2023, actually for the first quarter of this year. Is it possible to provide some sort of a soft review or guidance on how this new e-commerce regulation in Turkey may impact your revenue and market?
Speaker 5: I am trying to understand if this could, if this may lead to an increase in your capex requirement for 2023. Is there any sort of soft guidance for your capex for this year? And maybe I can ask other questions later after mine.
Speaker 4: Thank you so much, Hanzadeh, for your warm welcome. So your first question was about...
Speaker 4: the new e-commerce regulations and how it will impact our marketing costs in 2020-2023. First of all, we welcome the new regulations that were quite prepared last year and we have seen the full details of the regulations.
Speaker 4: And we know that it's going to be positive for the country to create a more rational competition environment.
Speaker 4: We expect our marketing investments to reduce.
Speaker 4: in line with improvements we already achieved in 2020-22 for performance marketing and in line with our customer retention strategy. Even without regulations that we are not subject to today with marketing and promotional stand level because we are smaller.
Speaker 4: that regulated limits, our priority is going to be improved optimization for marketing stance, focusing on retention, and hence with a strong ROI from our investment, we'll be achieving sustainable profitable growth. So ROI for every dollar stance is going to continue improving.
Speaker 4: In 2022, we already invested into externalizing our cargo services with EPCJET.
Speaker 4: Our investment has started to come to fruition on Friday. Almost 70% of Het Sijet customers are off-the-top-form customers as of today, which is quite strong. And for both Sijet and pay, we will be...
Speaker 4: frugally investing into the technology. It will be similar to last year level. We are not expecting an increase with this investment. And we are going to create new revenue streams for our company. And this is going to greatly benefit our company.
Speaker 4: from increasing e-commerce adaptation by merchants in Turkey. As we all know, the e-commerce penetration in Turkey is still quite unset. It's 15%. We know that it will be, we think that it will be.
Speaker 4: in a high increase in the coming years as well, and by externalizing our cargo and landing services to other merchants will be generating sustainable radio streams for our company.
Speaker 5: Did I answer your question? Let me answer the capex question. We will be spending a similar dollar amount of capex for year 2023 as well. Please note that majority of our capex investments are comprised of R&D, personal expenses and...
Speaker 5: on HepsyPay and for automation of our operating services in HepsyJet. So the total amount for 2023 is going to be similar with 2022 in double terms.
Speaker 2: Thank you very much Nihan and also Karambe and congratulations on the strong results by the way. Thank you. Thank you. As a reminder, if you would like to ask a question, please press star and one on your telephone.
Speaker 6: Kilkiran Hansade with JP Morgan. Please go ahead.
Speaker 2: Thank you very much. I just want to ask a few more actually. I also wonder what are the main changes in the competitive environment since we last met. I think Amazon also increased the prime days in 2022. Have you seen some sort of impact on your general customer acquisition?
Speaker 2: category. So which category will be your priority particularly, is it fashion or some other categories?
Speaker 2: So which category will be your priority, particularly if it's fashion or some other categories? Absolutely. Thank you. You're welcome.
Speaker 4: Thank you so much. So in terms of other competitors, competitive environments, of course, Turkey is vibrant, fast-growing e-commerce category. We are seeing a lot of merchants.
Speaker 4: trying to improve their online offering of COVID environment. Actually, this is a great advantage for externalizing our services. So our intention is to grow with that.
Speaker 4: In terms of specifically Amazon in Turkey, naturally I have some experience with last eight years standing the company. I believe that Subrata has strong advantages being a local player with high agility and local resources. As you know we have a strong retail business and developed marketplace business.
Speaker 4: Amazon is operating with retail business and they also announced, which is a public information, they will focus on developing countries over emerging economies.
Speaker 4: and taking prioritization in this global roadmap is challenging based on what we understand from the public announcement. So we don't think that they are offering new and different than the markets. We believe that we have very strong...
Speaker 4: and we have local engineering forces with high agility that can adapt, can understand the local needs and deeply we will stay quite strong for our customers.
Speaker 4: In terms of improving non-electronics, non-electronics is quite strategic for us. As you know, it's higher margin business and our premium, head to premium customers, functional shoppers have strong propensity to come back to us for non-electronics shopping.
Speaker 4: profitable businesses that we will be intentional.
Speaker 2: Thank you very much.
Speaker 6: Once again, to register for a question, please press star and one on your telephone.
Speaker 6: At this time, there are no further questions. I will now turn the conference over to Ms. Nilhana Nal Gudkcetikin for any closing comments. Thank you.
Speaker 4: Thank you so much for listening us. My closing remarks are Turkey has huge potential with young mobile population and the country has still relatively low e-commerce penetration. That's a great opportunity for us.
Speaker 4: The second important remark I want to do is we are going to deliver sustainable profitability in the company. This is Schoeling Q4 and we provided you an indication for Q1 to 1 to 3.
Speaker 4: Thirdly, we will digitize Turkish e-commerce. We will deliver best-in-class fintech and logistics capabilities to grow online retailers. So not only will we grow our core, but we will also act as an enabler for B2B partners. And finally, we will be ruthless in our prioritization. With this, I am going to conclude for today. Thanks a lot for your patience and support to us.
Speaker 6: Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone. Thank you for calling and have a good afternoon.
Speaker 1: And R.