Online bike marketplace BikeExchange (ASX: BEX) has successfully launched its AI Consumer Marketplace Platform in Germany, achieving a record-breaking Black Friday with €322k (A$534k) in sales—20% higher than the previous year.
The platform, set to expand to six more key markets, improves customer experience, simplifying the bike hunting and buying process. The platform’s uptake is reflected in rising conversion rates and improved EBITDA. For BikeEchange, the new strategic focus includes building new seller partnerships, exploring increased commission rates, and executing revenue-generating strategies such as third-party logistics aggregation, advertising, and data analytics.
BikeExchange CEO Ryan McMillan commented, “Our new AI Consumer Marketplace Platform is delivering immediate results with a superior customer experience and substantially better conversion rates for BikeExchange. We expect this platform to be rolled out across our seven key markets by the end of Q3 FY24.”
The Company is realising the new improvements through cost savings undertaken elsewhere.
In Q2 2023, BEX discontinued its capital-intensive Kitzuma Door-to-Door bike delivery service in North America. Then, in Q4 2023, BEX ceased operating its bike retail stores based in Colombia. Although these decisions incurred short-term restructuring and impairment charges, some of which will extend into FY24, they have yielded cost savings for the Company.
BEX has also taken the opportunity to save costs by investing further in its core technology platform. BikeExchange’s new Chairman, Dominic O’Hanlon, said, “The internal mantra has been to spend less on people and more on scalable intellectual property.”
Starting Q2 2023, BikeExchange invested heavily in a new eCommerce platform. This platform, designed to enhance the bike-buying experience, features improved search, product display, inquiry, and payment processes. The development has been mostly finalised by the end of 2023, and testing is happening in H1 FY24 across different BEX regions.
As a result, McMillan added, “Our normalised EBITDA continues to trend towards positive earnings through a combination of lower overhead, a better revenue model and increased conversion rates. We expect this trend to continue as we see the benefit of the new Platform being fully rolled out.”
The Company has also been focusing on improving its internal capability, with the commencement of a new CFO, Kyle Ferreira, and new CEO and Chairman.
In Q4 2023, the net revenue from operations in Europe, Australia, and North America saw a major 45% increase compared to the PCP, excluding the concluded business operations of Kitzuma and Columbia. Plus, the average eCommerce commission grew by 24% to 9.9%.
As part of strategic cost management, the business effectively reduced its fixed cost base by 50%, amounting to $1.9 million, in contrast to the $3.8 million incurred during the same period in the previous year.
BikeExchange, like most businesses, wants shareholders to stay well-informed and happy with its growth. McMillan said, “We are excited to be ramping up our investor outreach activities and hope to see the benefit of this and our positive operational execution reflected in a higher share price over [the] coming months.”
The positive trading trajectory is set to continue into FY24, characterised by lower operating cash requirements and expected ongoing growth in eCommerce revenues, thanks to the rollout of the new eCommerce consumer platform.
The Company ended Q1 FY24 with $2.4 million in cash.
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