DW8 Growth, page-15284

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barmy44

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395

02/08/22

17:00

Post #: 62882241
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Originally posted by steve10: ↑

They lost some marketplace revenue as some business was done direct off platform. This has been resolved by lowering fees & adding a few features in the software.

The weak part of the company is currently the lack of marketplace growth in terms of GMV & high cash burn but it could also become the most valuable part of the business if successful as global TAM is enormous.

Poor macro environment with rising interest rates, Covid, weather events & seasonality have been mentioned as headwinds by the company. Appears macro will not improve as rates will continue to rise in the short term, Covid will persist as there are currently 250k cases pw, weather events can occur at anytime so these headwinds remain. Seasonality, lower fuel prices & possibly a few big supplier sign ups are tailwinds next few quarters. They have recently lowered fees in an effort to attract larger suppliers with more common brand name liquor brands. They have been providing vouchers with min. spend amount to attract more buyers.

The range on the marketplace has more unique/niche brands rather than big name brands so for many buyers the range is limited & order values are small. Introducing some common big name brands at competitive pricing should make it more worthwhile for buyers to use the platform. Some suppliers were adding the platform fees onto their wholesale price thereby making the product 5-10% more expensive to buy via platform then direct from the supplier. With lower fee structure skimming only a few percent the pricing should be more competitive now on the platform. Appears the aim now is to continue growing product range, grow buyer numbers & grow buyer spend amount by having more mainstream products available on the platform.

Not sure what else they can do. In comparison, eBev commenced their marketplace with no fees to grow the platform & after 5-6 years have grown GMV to $154M according to their website. They have big brands onboard & claim to have some large venues using their platform exclusively. They are now attempting to skim 2-3% of GMV this year.

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Just FYI, thats your old mate Bentley / Datsun / Claude (and 30 odd other accounts) you're responding to.

DW8 Price at posting: 1.5¢ Sentiment: Hold Disclosure: Held
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