The Laybuy Holdings Ltd (ASX: LBY) share price has gone up in response to an update about its April performance.
What happened?
Laybuy reported that there was record sales across all regions during its ‘Laybuy Mania’.
Mania was held in the last week of April, which resulted in record sales in the UK, Australia and New Zealand when compared to previous Mania events.
If you’re wondering what Mania is, it’s an online and in-store sales event that occurs twice a year. Merchants offer exclusive deals and discounts to Laybuy customers for 48 hours in the UK and 24 hours in Australia and New Zealand.
In the UK, Laybuy recorded gross merchandise value (GMV) of NZ$2.9 million during the two-day Mania event. This was an increase of 70% on Mania April 2020 and an increase of 32% when compared to Mania November 2020.
In ANZ, Laybuy recorded GMV of NZ$1.9 million during the one-day event, an increase of 3% year on year, and 11% on Mania November 2020.
Mania also saw Laybuy reporting its second highest daily GMV in ANZ, only behind last year’s Black Friday. There were several large merchants the reported their highest trading day on the Laybuy platform, including Cotton On, JD Sports and Boohoo.
Website and app traffic was up 35% compared to November 2020.
Overall, Laybuy achieved GMV of NZ$60.2 million in April 2021, an increase of 52% compared to the prior corresponding period and equating to an annualised GMV of NZ$722.4 million, and up 3% on March 2021.
In the UK, Laybuy saw GMV growth of 85% year on year, with active customers up 166% and active merchants up 436%.
Management comments
Laybuy Managing Director Gary Rohloff said that events such as Laybuy Mania have been an important part of Laybuy’s strategy since the first Mania event was held in ANZ in 2018. The UK’s first Mania was held in 2020.
Mr Rohloff said: “Mania helps improve our appeal to merchants by helping them increase their sales. Of real value is our collaborative marketing approach, which sees the active promotion of discounts through both the merchant and Laybuy’s marketing channels.
“For Laybuy, Mania is also an important customer acquisition tool because it results in an increase in the number of customers signing up to Laybuy to take advantage of the discounts exclusively available to Laybuy users.”
Summary thoughts
Laybuy has been growing strongly and it is doing the right thing to increase the size of the business. However, I’m not sure how it will do against all of the competition and how much profit it can grow in the future.
I’m happy to look at other ASX growth shares outside of the BNPL space for now.
