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AussieCommerce Takes Top Spot in BRW Fast 100 2013
The AussieCommerce Group, including brands such as TheHome, Luxury Escapes and Deals.com.au, has been recognised for exceptional growth, taking out first place in this year’s BRW Fast 100.
The AussieCommerce Group is one of Australia’s largest, locally-owned e-commerce firms, combining seven specialised businesses. Now it has been recognised for its exceptional revenue growth in coming first in this year’s BRW Fast 100.
AussieCommerce first entered the market in 2010 and since then has realised 276 percent revenue growth over the past three years. For the past financial year the group reached a turnover of $43.1 million, which CEO Adam Schwab believes will hit $100 million in 2014.
While he’s busy overseeing the daily affairs of deals.com.au, Ouffer, the recently-acquired Cudo, TheHome, Luxury Escapes, Pop and The Meat Merchant, Schwab was able to find 10 minutes to discuss his latest success, a consolidating online retail industry as well as the new brand he’s keen to launch in a few weeks’ time.
Taking out first place in BRW’s Fast 100 is no mean feat. What does the recognition mean to you?
It’s a real honour, we’ve always loved BRW and idolised the people and businesses that get into their lists. That being said, the Fast 100 list is based on revenue growth, not profit or market value, so we have to take that into perspective. The group is definitely still a work in progress.
Did your recent acquisition of Cudo have a positive effect on your listing?
Cudo doesn’t actually affect this year’s results for the BRW list as we completed the purchase just after the relevant trading period closed in June. Acquisitions can have a significant effect on revenue, but it’s not the case this time around. We also purchased that business with internal funding, so again this lessens any impacts it may have on our ranking. We’re forecasting $100 million in revenue next year, so hopefully our current growth trajectory will be able to continue into next year.
Is it that attitude towards funding and investment that has placed you in good stead for weathering constrained retail conditions?
We’ve always been focused on profitability. When you look at some of our competitors, they’re either wholly-owned by media companies or have taken on significant investment from external interests, which in a period of heavy consolidation is beginning to have a telling effect on these businesses. For us, we’re completely internally funded and in that sense we follow the lean start-up model to ensure we reinvest our profits into growth rather than needing to pay off our debts. There’s not an expense that gets paid that I don’t approve and we have a super dedicated staff – a truly incredibly hard-working team.
Have you consciously changed direction at AussieCommerce over time as a result of changing market conditions?
When it comes to group buying, with Cudo and Ouffer supplying experiences and the like to consumers – it’s really only about 20 percent of our business. The majority of our interests actually lie in physical products and travel (with Luxury Escapes), and while we definitely had some great results with the old school group buying model, we began to consciously pivot away from that around two years ago. We consider ourselves to be more of a general e-commerce model. Group buying is great for generating engagement, but its selling products direct to customer that drives the bulk of our revenue.
How do you supply those products? Do you like to use drop shipping where possible or do you try to hold as much of your own stock as possible?
We use 3PLs for storing and distributing our products. We work with clients who drop ship as well, but it’s a smaller part of the overall mix (in the case of The Home, Pop and The Meat Merchant, virtually everything goes through our 3PL warehouse). For large, bulky items it makes sense to try and drop ship, but for the most part we try to manage our own supply chain wherever possible.
What’s this new brand we’ve heard rumoured to be joining AussieCommerce soon?
The Gourmet is a new site we’re launching in the coming weeks. When we bought Cudo we also happened to acquire The Meat Merchant as part of the deal. It’s a really well-run site and a fantastic concept that we’re currently pivoting across into The Gourmet. The Meat Merchant essentially supplied set packs of gourmet meat products, whereas with The Gourmet we’ll be offering lots more choice in terms of tailoring your selection of products, as well as serving a much wider range of items, including mustards and relishes, seafood, vegetables and more. This isn’t something we’ve seen on this scale in Australia before, but it’s certainly something that’s performing well in the US.
Have any one of your brands been the key driver for the revenue growth you’ve been recognised for today?
The Home’s growth has been fantastic, Luxury Escapes has been very strong and there’s also plenty of underlying, solid growth right across the board. Cudo may not have been included in the BRW results, but it has been performing well also. Overall, when you look at our revenue growth over the past few years, it’s been consistently linear and that’s always reassuring to us. Part of it is the strength of those offerings, but we feel we’re also becoming better and better at doing what we do. We’ve been through periods of learning through trial and error and while we made plenty of mistakes, we think we’ve learnt a lot as a result.