Press-Release | Krasnodar | August 31, 2020
Magnit and Delivery Club Launch Express Delivery
Delivery Club couriers have already started delivering goods from Magnit stores in Moscow. Delivery Club provides its users access to some 5000 items available in Magnit Convenience stores, including non-food assortment. Orders are delivered within 30-45 minutes.
Krasnodar, Russia (August 31, 2020): Delivery Club couriers have already started delivering orders from ten Magnit convenience stores in Moscow, by the end of 2020, express delivery service will be available in all districts of Moscow and St. Petersburg, as well as 15 largest cities of Russia. They include, first of all cities with a million-plus population, where grocery express delivery services are rapidly gaining popularity and show exponential growth. With this partnership, Magnit makes a new big step into fast-growing e-commerce market. The Company expects to attract new customers and increase existing clients' loyalty and frequency of their store visits.
This partnership with Magnit will allow Delivery Club to reach new heights in grocery express delivery and eventually extend the geography of its service to virtually all cities where it has in-house logistics capabilities (over 100 localities, not including Moscow and Leningrad regions).
In Moscow, Delivery Club users can order the entire assortment of Magnit Convenience stores that participate in the project, except for tobacco products, alcohol, and pyrotechnics. This includes fresh vegetables, fruits, dairy and meat products, confections, drinks, pet food, household chemicals, and others. There is no minimum order amount, and the delivery fee is 149 rubles, which will vary in the future: the larger the amount, the cheaper the delivery, down to free-of-charge. All orders will be delivered in a contactless way: a delivery agent in a protective mask and gloves will leave bags at a safe distance and wait for the customer to pick up their order.
Delivery Club will not only deliver products, but also, for the first time, employ its own pickers to collect orders in Magnit stores. Later, this function will be handed over to the retailer's employees, who will be trained in proper collection procedures. Special KPIs will be set for Magnit's order pickers to maintain the high quality of fulfillment.
"The partnership with Delivery Club is our next step towards creating an omnichannel offering for our customers. We're seeing rapid growth in the online food market, most notably in large cities, so it's important for us to provide customers with an attractive offer in this segment. I'm glad that Delivery Club has become our partner in e-commerce development, since they have solid experience in express delivery. Magnit as the largest convenience chain in Russia has great relevant offering. Combined we are able to offer our customers a high-quality service, attractive products and prices," - said Florian Jansen, Deputy CEO and Executive Director at Magnit.
"Customers are becoming more demanding to the speed of delivery. We see that they want to receive quickly not only food products they need now, but also large orders comparable to an actual shopping trip. We can satisfy their first need in cooperation with Samokat, a service that operates under the "dark store" model. The launch of delivery from food retailers by our delivery agents will satisfy the second need. Our expertise in logistics and delivery speed, coupled with the extensive assortment of Magnit stores, will provide access to express delivery of goods to residents of dozens of cities across the country already in 2020," - commented Guvenc Donmez, Chief Executive Foodtech Officer at O2O Holding (joint venture of Mail.ru Group and Sberbank).
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Note to editors about Magnit:
Public Joint Stock Company "Magnit" is one of Russia's leading retailers. Founded in 1994, the company is headquartered in the southern Russian city of Krasnodar. As of June 30, 2020, Magnit operated 38 distribution centres and 20,894 stores (14,581 convenience, 472 supermarkets and 5,841 drogerie stores) in 3,710 cities and towns throughout 7 federal regions of the Russian Federation.
In accordance with the unaudited IFRS 16 management accounts results for 1H 2020, Magnit had revenues of RUB 763.4 billion and an EBITDA of RUB 86.9 billion. Magnit's local shares are traded on the Moscow Exchange (MOEX: MGNT) and its GDRs on the London Stock Exchange (LSE: MGNT) and it has a credit rating from Standard & Poor's of BB.
Information about Delivery Club:
Delivery Club is the market leader in the delivery of ready-made food in Russia. The service fulfills over 5.5 million orders monthly. At the end of 2019, Delivery Club's revenue amounted to 4.46 billion rubles; at the end of the first half of 2020, it was 4.32 billion rubles. More than 28 thousand eateries in over 250 cities across the country are connected to Delivery Club. In Moscow, St. Petersburg, and a number of other cities, Delivery Club users can order not only ready-made food from restaurants, but also delivery of food products and everyday goods. Delivery Club is also making developments in the field of takeout ordering. In 2019, Delivery Club became part of an O2O (online-to-offline) platform in the food and transport markets, which is being established by Mail.ru Group and Sberbank.
This document contains forward-looking statements that may or may not prove accurate. For example, statements regarding expected sales growth rate and store openings are forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from what is expressed or implied by the statements. Any forward-looking statement is based on information available to Magnit as of the date of the statement. All written or oral forward-looking statements attributable to Magnit are qualified by this caution. Magnit does not undertake any obligation to update or revise any forward-looking statement to reflect any change in circumstances.