18 July 2022

Х5 consolidates online businesses under X5 Digital

Moscow, 18 July 2022 – X5 Group (“X5” or the “Company”, LSE and MOEX ticker: FIVE), a leading Russian food retailer, has spun off its online business, completing a move announced a year ago. The new entity, X5 Digital, will oversee the Group’s express delivery technology platform, small dark-store infrastructure ensuring 40-minute delivery of the Pyaterochka and Perekrestok product ranges, and large dark-store infrastructure with an expanded assortment under the brand. Larisa Romanovskaya will head the integrated e-grocery unit. 

Vladimir Salakhutdinov, Director of Strategy and Business Development at X5 Group, commented:

As we moved forward with the spin-off of our online business, we discussed various scenarios for developing X5’s online businesses, both on our own and in partnership with companies actively growing in adjacent e-commerce segments. In particular, we considered monetisation through a partial sale and the creation of additional shareholder value. In the end, we decided to keep X5 Digital within the Group.

“In today’s market environment, reliance on our own infrastructure and commercial capabilities will help to develop our online businesses with maximum speed and flexibility. This efficient online economic model creates new growth opportunities, while monetisation through market capitalisation, in our opinion, has no prospects at the moment. Completing the creation of our own delivery infrastructure and building a stable channel of remote communication with the customer enables us to start working with external sales channels, including connecting delivery aggregators, which we plan to do in the near future.

As an umbrella structure, X5 Digital will help to increase online sales by meeting the full range of customer needs in the e-grocery segment – from small purchases with fast delivery within city limits to bulk online hypermarket purchases that can be delivered to any location, including suburban areas and the countryside. Uniting these services under the control of a dedicated unit will provide for a seamless transition between customer needs across all X5 channels and mobile apps, as well as maximise operational efficiency. 

For X5’s online hypermarket and express delivery customers, the process for placing and receiving orders will remain unchanged. The retail chain apps and the website will also continue to operate as usual.

In Q2 2022, the cumulative GMV of Perekrestok and express delivery services amounted to RUB 15.9 bn, up 34.1% year-on-year, including VAT, promo codes and bonuses. In April 2022, the number of online hypermarket and express delivery orders reached 100,000 on peak days. As of 30 June 2022, express delivery was available from 1,718 stores (1,007 Pyaterochka stores and 711 Perekrestok supermarkets) and 45 dark stores in 54 regions. In Q2 2021, the average number of express delivery orders per day was 58.9 thousand, with a delivery time of ca. 60 minutes and an average ticket of RUB 1,675 for Pyaterochka and RUB 1,888 for Perekrestok. The online hypermarket Perekrestok operates in 82 Russian regions, with delivery service available in eight regions and self-pick-up in the remaining 74.