Russia's largest food retailer X5 has created a separate entity for its digital businesses, the company announced, paving the way for the new entity to go public.
X5 is discussing plans for an initial public offering (IPO) of its online business, which accounted for just 1% of the group's total sales in 2020 but is growing fast, with transaction volumes rocketing 347% last year.
'Several Promising Options'
'The company is considering several promising options for further development, including both attracting investors on the open capital market, investments through strategic partnerships, and independent development within X5,' the retailer said in a statement.
X5 said it planned to provide more details on strategic options for its digital business development within a year.
The group's digital businesses include online shop Perekrestok Vprok (Perekrestok.ru), the express delivery service for X5's Pyaterochka and Perekrestok stores, and Okolo, a delivery service it launched last year.
In May, the retailer announced plans to introduce its Okolo-branded delivery aggregator to new geographies outside Moscow and the Moscow region for food and ready-to-eat meals.
The expansion will see Okolo extending its services to St Petersburg, Voronezh, Nizhny Novgorod, Kazan, Krasnodar, and Rostov-on-Don.
X5 Retail Group reported a 14.1% year-on-year growth in revenue, to RUB1,978 billion (€22.5 billion), in full-year 2020 from RUB1,734 billion (€19.7 billion) in 2019.
According to chief executive officer, Igor Shekhterman, X5 entered 2021 on a “strong footing” as the leader in both online and offline grocery in Russia.