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Ozon is one of the largest marketplaces in Russia: a platform on which tens of thousands of sellers trade their own goods, while the company provides the storefront, the warehouses, the delivery and the settlements. It began in 1998 as an online bookshop. Its depositary receipts trade on the Moscow Exchange under the ticker OZON.
The key to understanding a marketplace is that it earns not on a markup but on a commission. The goods belong to the seller; the platform takes a percentage of the sale, plus fees for warehouse storage, for order picking and for delivery. That is why the platform's turnover and its revenue are two very different numbers, and they must not be confused.
The second pillar, growing faster than the first, is advertising inside the platform: sellers pay to have their goods shown above those of competitors. This income requires almost no costs and is therefore far more profitable than logistics.
The third is financial services: the group's bank serves both buyers and sellers, providing instalment plans and working capital loans. The cost-side peculiarity of the model: warehouses, sorting centres and pickup points are built in advance, for future turnover, and for years they leave the company loss-making on paper while the business keeps growing.
Commission on the sales of third-party sellers, plus fees for storage, order picking and delivery.
Promotion of goods inside the platform — the most profitable source of income.
The group's bank: instalment plans for buyers, working capital loans for sellers, settlement services.
Warehouses, sorting centres and a network of order pickup points.
Strengths and weaknesses describe the business itself. Opportunities and threats describe what may happen around it.
It is a marketplace: a platform where third-party sellers offer their goods to buyers. The company provides the storefront, the warehouses, the delivery, the pickup points and the settlements, and also develops advertising and financial services.
Turnover is the value of all the goods sold on the platform, including those that belong to others. The company's revenue is only what it keeps for itself: commission, logistics fees, advertising, financial services. That is why revenue is several times smaller than turnover, and the two cannot be compared directly.
Because warehouses, sorting centres and pickup points are built in advance, for future volumes, and their cost is charged to expenses straight away. Until the network is fully loaded, the business grows while the financial statements show a loss.