Magnit, Russia’s second-largest retailer, has started testing a delivery service from its stores in the southern city of Krasnodar, the company said on Thursday, according to RBC. Deliveries will be handled by local company Broniboy, the report said.
The company is currently testing delivery from five largest stores, with about 10,000 items available on its mobile application.
Magnit’s largest competitor and market leader, X5 Retail Group, outsources delivery services for stores of its formats Perekrestok and Karusel, while Perekrestok also operates its own online store with in-house delivery. The main format Pyaterochka cooperates with Dostavka.Market, in test regime in about 30 stores in Moscow.
This month X5 Group continued to expand its online retail capabilities, teaming up with Courier Service Express (KSE). KSE will be delivering online orders to X5 stores Pyaterochka, Perekrestok, and Karusel, as well as door-to-door grocery deliveries.
Magnit reported a drop in net IFRS income of 52% year-on-year to 3.54 billion ($54 million) in 1Q19, with Ebitda decline of 6% y/y and Ebitda margin decline by 110bp to 6%.
“Magnit reported weak 1Q19 IFRS and trading update, significantly missing BCSe and market expectations,” BCS Global Markets commented in late April.
In turn, X5 Group in 1Q19 posted “very strong results, beating expectations on EBITDA by 9% and net income by 21%. EBITDA margin reached solid 7.3% versus expected 6.7% – strong positive,” BCS GM said on April 25.