Australian marketplace The Iconic has recorded a 12.6 per cent decline in net merchandise value (NMV) in the fourth quarter of 2023.
This follows a 18.4 per cent drop in NMV for the third quarter, and a 9 per cent drop in the second quarter.
NMV is the value after deducting all fees and expenses from gross merchandise value. GMV is the total value of goods sold.
Despite the drop in the fourth quarter, The Iconic’s gross margin improved by 1.5 percentage points to 46.4 per cent.
The Iconic's losses join an overall slump in NMV recorded by its parent company Global Fashion Group (GFG) of 14 per cent to €369 million (AU$612.62 million).
GFG’s two other marketplaces also recorded losses, with Zalora in Southeast Asia down 18 per cent in NMV while Dafiti in Latin America was down 12.4 per cent.
Across all markets, lower conversion rates led to a 19.5 per cent year-on-year drop on orders. However, this was partially offset by growth in average order value, increasing 6.9% in Q4, driven primarily by inflationary pressures.
“2023 was a year of significant change and adaptation for GFG, and I am proud of the team’s resilience and focus,” GFG CEO Christoph Barchewitz said.
“We anticipated a challenging market and took action to navigate it by prioritising growing our marketplace and platform services, reducing costs and advancing our strategic initiatives. As a result, we achieved adjusted EBITDA breakeven in Q4, and maintained a healthy gross margin.
“We entered 2024 with a stronger foundation and a clear path forward to capitalise on our long-term potential.”
In 2024, GFG expects to deliver a 5-15 per cent decrease in NMV on a constant currency basis, implying €1.1-1.2 billion in NMV (AU$1.8-1.9 billion).
Adjusted EBITDA is expected to be in the negative, at €25-45 million (AU$41.5-74.7 million).
According to GFG, this guidance reflects ongoing market challenges which have been observed in similar topline trends in the first two months of 2024 compared to Q4 2023.