In the wake of a pandemic which has led to much more time spent at home, Australians have been a productive bunch, spending big on technology products. That spending has shown no signs of slowing down either, with eCommerce company Harris Technology (ASX: HT8) reporting a 209% increase in revenue to $42 million.
Interestingly, the majority of that $42m has been generated in the second half of FY21 when Aussies have been free to roam shopping centres but still elected to buy online. Harris Technology reported $12.5m in sales for the June quarter, off the back of $10.4m for the March quarter.
The record-breaking year caps off a quietly achieving financial turnaround where Harris Technology was restructured in 2019 to operate under its current model. Since then, the Company has emerged as the top marketplace tech seller in Australia, challenging more established retailers but able to compete by not having the overheads associated with retail shopfronts, of which Harris has none.
“Wide scale adoption of online shopping has continued to accelerate which has fueled Harris Technology’s rapid growth as a pure online player during the peak of the pandemic and beyond,” said Harris Technology CEO, Garrison Huang.
The $42m YTD sales more than tripled the $13.6m generated in FY20 and has been achieved via a unique eCommerce strategy in partnership with Amazon, eBay and other online marketplaces which are the “go-to” sites for most online shoppers. With over 3,000 tech products listed on those marketplaces, it is common for customers to think they are buying from Amazon, when in fact they are buying from Harris Technology.
Highlighting the popularity of their products that include computers, smartphones and general home office accessories, the Company has recorded more than 4,750 customer reviews on Amazon in the past 12 months at an almost unheard of 100% customer satisfaction.
Having returned the Company to profitability last year by generating $1m NPAT for FY20, Harris has borne fruit from scaling their operations over the past 12 months.
Initially Harris emerged as the Number 1 ranked tech seller on Amazon Australia, but has now taken over as the Number 1 overall across all categories. The hugely successful strategy is now being replicated with eBay where Harris recently surpassed $1m in monthly sales having targeted growth on the platform in January when generating just $137k.
Making the YTD revenue even more impressive is the ability for Harris Technology to accelerate their sales despite increased competition in the tech retail landscape. With the benefit of first mover advantage and a trusted brand Harris is able to win in a space increasingly focused on by traditional retailers who are also driving traffic to the online eCommerce sites.
Harris Technology however, continues to benefit from the advertising war between the majors such as Amazon and eBay who are investing big across Australian media.
Since launching in 2019, Amazon Australia has established similar infrastructure to its US operations via an aggressive growth strategy. Capitalising on their branding and the growing Australian appetite for online shopping, Morningstar analysts expect Amazon Australia to account for 25% of online retail by 2030. Meanwhile, Harris Technology is front-and-centre as the platform’s Number 1 ranked marketplace seller as evidenced by the mutual growth of both companies which shows no signs of slowing.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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