Vaibhav Global Limited (VAIBHAVGBL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Vaibhav Global Limited Q4 FY '20 Earnings Conference Call. [Operator Instructions] Please note this conference is being recorded. I would now like to hand the conference over to Mr. Shiv Muttoo from CDR India. Thank you, and over to you, sir.

Thank you, Janice. Good evening, everyone, and thank you for joining us on Vaibhav Global Earnings Conference Call for the quarter and Year Ended 31st March, 2020. Today, we have with us Mr. Sunil Agarwal, Managing Director; Mr. Vineet Ganeriwala, the company's CFO; and Ms. Dipti Rajput, DGM, Investor Relations. We will begin the call with opening remarks by Mr. Sunil Agarwal on the business operations, key initiatives and a broad outlook, followed by a discussion on the financial performance by Mr. Vineet Ganeriwala, Following the management's opening comments, we will open the forum for Q&A. Before we get started, I would like to point out that some statements made or discussed on today's call may be forward-looking in nature and must be viewed in conjunction with the risks and uncertainties faced by the company. A more detailed statement and explanation of these risks is included in the earnings presentation shared earlier. The company does not undertake to update the forward-looking statements publicly. I would now like to invite Mr. Sunil Agarwal to take -- to start proceedings on this call. Over to you.

Thank you, Shiv. Good evening, everyone, and thank you for taking time to join us on Vaibhav Global Limited's Q4 and FY '20 Earnings Conference Call. I wish you, your team and loved ones health and safety. Before we move forward, I take this opportunity, once again, to welcome Vineet Ganeriwala, our new CFO, to the Vaibhav Global management team. Vineet comes to VGL with over 2 decades of rich experience across diverse industries in multiple geographies. Our erstwhile CFO, Mr. Puru Aggarwal, will continue to be the part of core management team as [ President ] Strategy & Business Development. With these changes, the management capital of VGL has strengthened further. This conference call, I would like to first talk about business continuity during COVID-19, followed by the performance during the year. The year 2020 began on an unexpected and a difficult note with the entire world coming to standstill due to the spread of the pandemic. Economic activity, manufacturing operations, global supply chains have been defected and consumption patterns alter at macro as well as micro levels. Despite the uncertainties over the last few months, our retail businesses, that is, Shop LC in U.S. and TJC in U.K., have been operational throughout. Based on the announcements by the authorities in Texas, U.S.A., Shop LC operations are part of the essential business category. And as per U.K. government standards, online retail businesses are encouraged to remain open. Ancillary services like delivery services remain functional all through the pandemic in both U.S. and U.K. With customer at the heart of the business, we rapidly augmented product offering across our omnichannel sales platform to include over 250 essential products, including masks, sanitizer, health supplements, kitchen accessories, coloring books, board games, et cetera. This enabled us to deepen our engagement with existing customers while expand in the new customer base. In addition, the traction on our retail platforms is supported by shutdown of retail -- traditional retail in line with social distance guidelines. To ensure undisrupted call center functioning, the entire call center was moved to remote workforce. We also initiated auto-routing into outsourced call center to reduce the wait time. The integration of Five9 software into our IVR system that we undertook in Q2 provided a strong support for managing high traffic on the platforms in recent months. Robust IT infrastructure helped create a borderless workforce to support business globally with no latency. As a contingency plan, we've built remote TV production and broadcast solution to ensure continuity in operation, should the campus not be accessible due to the lockdown. Coming to the supply side of business. Our global supply chain consists of wholly owned subsidiaries in key sourcing geographies of India, China, Thailand and Indonesia. Over the past 1 year, the tenacity and immense value of robust supply chain has been put to test several times on account of external [indiscernible], including the U.S.-China trade war and the current pandemic. It is worth noting that the supply chain has consistently delivered a prudent plan to market and efficient product sourcing, providing solid support to our B2C model. Coming to the specifics, there was a temporary shutdown in China in the start of the year, resuming operations on March 2, 2020. Deliveries to other supply countries [indiscernible] during that time. A lockdown in India led to temporary closure of Indian operations at the end of March, resuming partial operations on April 27, 2020. China, Thailand and Indonesia filled the void during that time. We have been adhering to all the directives issued by government authorities across our global operations. Now more than ever, our commitment to all our stakeholders remains un-wavered. With the well-being of our team at the core, we have undertaken appropriate precautionary measures to ensure safety and health of all our employees. Stepping up the situation, we realigned our business to meet customer needs through uninterrupted supply of essentials. As an expression of gratitude to frontline health care workers, we donated approximately 127,000 masks to approximately 200 hospitals, care homes, police stations and even grocery stores. Extending support to the government in India, post announcement of lockdown, VGL donated approximately 1.6 million meals to migrants and people in need through Akshay Patra in Jaipur, India. Overall, through our flagship CSR initiative, the one-for-one program, we have provided nearly 37 million meals to school children across India, U.S. and U.K. since inception of our one-for-one program about 5 years ago. Let me now take you through the operating performance and key initiatives during the quarter under review. I'm glad to share that our global operations have been delivering on both societal as well as economic growth. On constant currency basis, Shop LC U.S. marked a growth of 9% year-over-year, and TGC U.K. marked a growth of 17% year-over-year in Q4 of FY 2020. Despite higher returns witnessed during the quarter due to COVID, the company reported strong profitability. We remain focused on strategic objectives of expanding the 4 r's underlying business performance, that is, widening reach, growing new customer registration, improving customer retention and increasing repeat purchase. Successes on these parameters have resulted in increased market share, higher margins and strong cash flows. In Q4 FY '20, the number of TV households in our coverage stood at 99 million as compared to 100 million in the same quarter last year. Unique customers for FY '20 at 361,915 increased from 342,599 in FY '19. Average annualized quantity purchased by each customer in trailing 12-month basis is stable at 30 pieces per customer. Customer retention rate stands at 50% and is steadily improving. Revenues have increased at CAGR of 12% between FY '16 and FY '20, while EBITDA has increased at CAGR of 39% during the same period. EBITDA margin has improved from 5.9% in FY '16 to 14% in FY '20. This has led to strong cash accretion, steady improvement in return ratios and growing payouts to shareholders. I'm pleased to share that our Board of Directors approved a special interim dividend of INR 19.74 per equity share during the quarter and has recommended a final dividend of INR 7 per equity share now. In the current financial year, FY '21, we continue to deliver secular growth in the world where last mile delivery has become the new normal. The current industry disruptions will cause long-term shift in consumer behavior, leading towards home-shopping formats, including TV and web. The ability of retailers to transform and adapt with agility is defined with chances of survival. At VGL, we believe this is an opportunity to serve our customers with product offering that meets wants and needs. And given our strong operation and financial standing, we will emerge even stronger on the other side. As per IMF World Economic Outlook projections, U.S. output is expected to decline by 5.9% in 2020 and improve by 4.7% in 2021. U.K. output is projected to decline by 6.5% in 2020 and improve by 4% in 2021. Our current business model emerged during global financial crisis of 2007, 2008, when created a niche for ourselves as a deep value discounter. Since then, we have been committed to our core resource of wealth, especially in adversity. The current times favor those who offer deep value for money and the segment indicators too will only expand further given our value proposition. Given the company's resilient operating structure and agility, in the medium term and short term, we expect revenue growth to grow by 15% to 70% -- 15% to 17% on constant currency basis for our B2C business with consummerate operating margin leverage owing to a relatively fixed cost base. To conclude, I would like to express my sincere gratitude to VGL team, our customers, suppliers, for all the support, and a special thanks to the frontline workers across the globe. With that, I now hand over the forum to Vineet to discuss financial performance for the period and the year. Over to you, Vineet.

Thank you, Sunil. Good evening, everyone, and welcome to Vaibhav Global Limited's Q4 and FY '20 Earnings Call. Hope you and your near and dear ones are safe and healthy. I'm glad to join you all on my maiden earnings con call and will take you through our financial performance for the quarter and full year ended 31st March, 2020. As stated previously, effectively 1st April, 2019, the group adopted the new accounting standard for leases, applied to all lease contracts existing on April 1, 2019, using the modified retrospective method and has taken the cumulative adjustment to retained earnings as on the date of initial application. Accordingly, group is not required to restate the comparative information. A detailed note related to the said accounting standard has been shared along with the results table published day before yesterday. Rapidly adjusting to the new normal, we balanced safety and business to deliver positive results. Revenue has improved from INR 462 crore to INR 498 crore year-on-year during the quarter under review. For full year FY '20, revenue increased to INR 1,986 crore compared to INR 1,814 crore for FY '19. As you would know, the retail or B2C business has been our key focus. This currently constitutes about 97% of the total revenues. We operate our proprietary TV- and web-based platforms for direct customer outreach, and this business grew by 14% year-on-year for the quarter and 15% year-on-year for the full year. We witnessed healthy growth in both the geographies. On constant currency basis, Shop LC U.S. grew 9% year-on-year for the quarter and 13% year-on-year for the full year, while TJC U.K. grew 17% year-on-year for the quarter and 19% year-on-year for the full year ended 31st March, 2020. Towards the end of the quarter, we witnessed increased return rates owing to some nervousness in U.S. around the pandemic. Mapping customer feedback with business results, we promptly shifted the product mix to cater to the current requirement of our customers. With agility, we introduced essentials while exploring future opportunities in this segment along the way. As early adopters of the omnichannel distribution model, VGL continues to build a deep commitment to its customers through the diverse channels of television, web, mobile apps, marketplaces, social media platforms and several new-age digital platforms. This integrated model allows cross-referencing of customers, which favors business growth as the lifetime value of an omnichannel customer is meaningfully higher than a web-only or a TV-only customer. TV revenues grew by 16% year-on-year for the quarter and 11% year-on-year for the year. Web revenues, on the other hand, grew 10% year-on-year for the quarter and 24% year-on-year for the full year. Within web, mobile sales constitute around 60% of the total web sales. Although we continue to report TV and web sales separately, it is important to remember that both these channels are rapidly converging from the customers' perspective to create a symbiotic ecosystem. Over the past few quarters, we have scaled down the B2B business as we consider it more opportunistic and not core to our longer-term objectives. During FY '20, we registered revenues of INR 69 crore in this business compared to INR 147 crore in FY '19. Over the years, VGL has created a robust supply chain with manufacturing and sourcing operations across U.S., Asia and Europe, supplemented by some product ranges sourced locally in the U.S. and U.K. We are the only company in the peer group that has its own manufacturing setup in addition to the direct sourcing offices that operate without the intervention of external agents. This allows us substantially high gross margins at around 60% levels. We have maintained such margins over the last several years across an expanding portfolio of products. Gross margin came in at 60% for Q4 and 62% for FY '20. During the quarter, EBITDA improved by 29% year-on-year to INR 60 crore, and margins expanded by 190 basis points at 12%. For full year FY '20, EBITDA came in at INR 276 crore, growing 27% year-on-year compared to last year, and margins increased by 190 basis points to 14%. PAT was INR 40 crores for the quarter, increasing by 22% year-on-year, and margin improved by 100 basis points to 8%. For full year FY '20, PAT was INR 190 crore, expanding by 23% year-on-year, and the full year PAT margins increased by 120 basis points to 9.6%. During FY '20, we incurred CapEx of around INR 35 crores, attributable mainly towards purchase of an adjacent factory building in Jaipur, for INR 6 crore, investment of INR 4 crore in solar power plant and balance towards global ERP and equipment and furniture at new warehouses in U.S. and U.K. Our operating model remains significantly cash accretive. Operating cash flows for FY '20 stood at INR 211 crore, and free cash flow stood at INR 176 crore. For the fourth quarter, we reported operating cash flows at INR 68 crore and free cash flow of INR 61 crore. Our return ratios continue to expand. Return on average net worth came in at 26%, whereas a low debt structure allowed return on average capital employed to improve to 46% for FY '20 as against 37% for FY '19. While concluding, I would like to say that we have delivered strong performance amidst the ongoing pandemic and a stressful environment. This was primarily on the back of proactive measures taken by the management, supported by our strong balance sheet. Going ahead, we will continue to rationalize costs across all business functions and geographies while maintaining a healthy balance sheet. We are also confident of continuing our operating momentum and remain optimistic about the business. With that, I conclude my opening remarks and request the operator to open the forum for questions.

[Operator Instructions] We take the first question from the line of Mukesh (sic) [ Pritesh ] from Lucky Investment.

Sir, first question is, there is this interplay of lowering volume growth, higher realization, but a lower GM, gross margin. So how should we read that? And what should be the course direction here because the GM is down about 100 basis points for FY '20 and whatever 200 basis points in quarter 4 with a plus 10% type realization growth. So if you could throw some light there.

Thank you for your question, Pritesh. As I mentioned in earlier calls also, we look at our business model as very agile. So if we look at what customer is pulling from us. If it is a higher price point, we offer slightly higher price point, but within our guidance of being value retailer and approximately 1/2 of what other retailers are. So we have a certain range within our company. So we operate within that range from a price point perspective. And the volumes are driven from the price point because customer has certain budget or some amount in their mind. If they reach their -- that level, then they may not go higher than that. Your next point about the gross margin. Our aim is to constantly monitor the gross margin to stay above 60%. And from above that, there's a 1% or 2% margin movement. We don't pay so much close attention because we have such a varied product line. Just as a perspective, we launch about 150 new products every day, and with different margins in different products. So in a business like cement or Parle-G biscuit, is with very few SKUs, and we can maintain a certain constant margin within those limited SKUs. And our SKU base is very immense, so margin can vary a bit. But as long as we maintain above 60%, that is our internal guideline.

So that explains. So if -- so I was a bit worried if the gross margins keep on going down, then there is a ceiling on the EBITDA margin or the operating leverage play. But since you're saying that 60% is what you would look at and not go below that, then the business model has a scope for operating leverage.

Correct.

Okay. My second question is now there is an interplay of recession in the countries that you are operating and there is direct payout which have been given to the larger population there. So considering these 2 divergent elements, what do you think should be the course of business for the current financial year?

So we are giving guidance of 15% to 17% top line growth in combined business and corresponding operating leverage will be there.

Could you throw some color in terms of -- is it a customer pulse or any other data point that you're relying on for a double-digit growth?

So as I mentioned earlier in my opening comments about our 4 r. So first is the reach. So we continue to expand the reach through TV -- through television, by the way of having additional simulcast channels; through OTA markets, which is over-the-air antenna markets, which is expanding quite rapidly; through OTT, that is over-the-top streaming platforms; through marketplaces, there is Amazon, Walmart, eBay and Wish; and through social [ DR ]. So we are continuing to expand the reach. And the next is acquiring more and more customers. So during the pandemic, during last couple of months, we have seen the new customer acquisition has been higher than normal due to essential products that we had. So as a nation, we had about 250 new essential product, which are new to the business, and that has attracted a lot of customers. And we are trying to transition those customers to the main business. So far, transition rate has been in double digits, and we're trying to increase it to higher double digits. And the third is retention. So we are constantly improving the retention. So we are standing at around 50% now, and we are hopeful to improve that slightly over the years. And the last, fourth, is repeat purchase. Our repeat purchase is approximately 30, with new advent of customers. They're coming in for essentials. It may not go up substantially during the year than 30, can go slightly low. But all these factor, 4 sectors combined, gives us confidence that we'll attain 15% to 17% growth. In fact, the current quarter may see slightly higher than that, but the next quarter may see slightly lower due to U.S. elections. But for the current financial year, we're fairly confident of 15% to 17% year-over-year growth.

Okay. Have we formulated a payout policy for us? Last year, the cash -- the PAT payout were fairly high, even considering the payback -- the buyback. So have we formulated a dividend payout policy?

Vineet, you want to mention?

Yes, Sunil, I'll take that. Yes, we have formulated a dividend payout policy, and that has been posted in the website today as well. So our endeavor is to distribute to the shareholders 20% to 30% of our free cash flow for the year. Of course, Board, while recommending or approving dividend, will take into account the other circumstances and may give special higher dividend or at times a lower one. But as a general, the endeavor would be to distribute 20% to 30%. And if you look at the payout of the last year, the interim and the final dividend, which the Board has now recommended, both added together is about 25% of the total free cash flow for the last year.

Okay, okay. And lastly, sir, the U.K. business until last year was not profitable or, let's say, low profitable and generating extremely low cash flow. So what is the update specifically on U.K. business because -- in terms of the profitability and the cash flows? My last question.

So U.K. has been growing very well between 17% to 20% year-over-year. As I mentioned in my opening remarks, U.K. grew 17% for the quarter and 19% for the year, for the last financial year. And we expect the growth rate to be similar or higher in the current financial year and coming years as well.

But my question was on the profitability there, the margin profile and the cash flow.

So I don't have exact gross margin. Gross margin is overall very strong. But profitability, we don't split separately from the EBITDA perspective. Vineet, do you have more information on that?

So U.K. business has been profitable since last many years, like 3 to 4 years, it has been quite profitable and right now, is sitting at a very healthy EBITDA margins. But like Sunil mentioned, we don't report the profit number for the both entities separately and only report the consolidated one. But yes, it is quite profitable and generating healthy cash.

We take the next question from the line of Vikrant Kashyap from Kedia Securities.

Sir, my first question is what is our mix of jewelry and non-jewelry segment. And how do you see it panning in next 2 to 3 years?

Sure. So currently, jewelry is approximately 78% -- or 78% to 80% in the U.S. and about 58% in U.K. The rest is non-jewelry. And over the years, it may -- the non-jewelry will continue to grow up as we find product categories that gives us more profitability or more per minute revenue and per minute margin compared to jewelry. And what we look at per minute productivity ratio, that consists of margin; new customer acquisition; and overall consolidated revenue, that includes the shipping revenue and the product revenue. So we look at all these product mix, which is combined into our metrics productivity ratio per minute. And we constantly look at that metrics productivity ratio. And based on that, we take the decision of addition of a product line or exit of a certain product line. And so this is -- we don't have a certain target for that for the long run. We let the -- each category earn its space into our product mix.

Okay. You also mentioned in your opening remarks that you are looking to serve your customers with new product that serves their needs and wants, right? And we have seen books as a category in, say, on Amazon and likewise other channels, which is a big market for the online books. Have you think or have you considered adding it to your product catalog?

So online book is a very traditional category and only suitable for very large players like Amazon or Borders. For us, to get into the competitive product category may not be -- may not allow us 60% gross margin that we have in the guideline. So but we do continue to monitor the additional product line, as I mentioned in my opening remarks that during pandemic, we found that the coloring books received great traction; our board games received great traction; our supplements, vitamin supplements were accepted very well. So we'll continue to monitor these categories. And if this stand for time after pandemic, we'll continue to expand them. But our guiding principle is we have a 60% gross margin, and each category must make its space by way of metrics productivity per minute.

Okay. So you have driven by these 4 factors. And you also mentioned about increased return ratios in U.S. So what are they right now? And what was they earlier? And do you think it will impact on your performance anyway going forward?

Vineet?

Yes. So returns in U.S. is -- does hover around 18% to 19%. In U.K., as a country, it is a little higher and hovers around 26%, 27%. In Q4, we saw an increase of about 2% to 3% because of this nervousness due to pandemic. But in the coming months, like in the current month, we see that it has again stabilized. So we don't foresee the return percentage to increase -- continue increasing further, but it's again back to the normal return percentages, which we saw in the last year.

Right. We also talked about our increased focus on marketplaces, along with OTT and OTA, social media also. Have you seen any traction or have customer engagement has improved? Or have they started coming to our own platform from the likes of Amazon and eBay, etc.?

Yes. So the business has rapidly increased on the platforms. So just to give you an example, in 2019-'20, the business was approximately 220% -- 120% more than the year before. And the current financial year also, we are seeing such kind of growth on the marketplace. It's a small base, but we are still seeing tremendous growth. The customer transition from marketplace to main business is still low single digits. But even that is meaningful because when the customer comes in main business, their buying patterns are similar to our own acquired direct customers for digital platforms.

Okay. My last question is: Why our sales growth on web has been only 10% this quarter? Because it has been rapidly growing quarter-on-quarter, year-on-year. Is there anything that you can -- yes, please?

There were -- only for Q4, there were 2 factors. One was the year before, we have done massive promotion on our e-comm platforms, so they had high base. And the second is the -- in Q4, there was nervousness in overall business that reflected on lower overall growth rate. But we are quite confident that in current financial year, our e-comm growth rate will be north of 25%.

North of 25%. Okay, okay.

Next question is come from the line of [ Akash ] from Motilal Oswal Securities.

So I have a couple of questions. First is on when we speak about, let's say, growth for more than 15% for the year, so this year is, I would say, a special year because of the ongoing pandemic. And since we are selling essentials now, growth could also be driven by the essential category. So I wanted to understand whether the outlook of 15% will stay for fashion jewelry and fashion accessories as well.

So we give growth projections for -- overall for the business, [ Akash ]. So essentials are just approximately 15% of our business right now, in the per minute. There's not massive -- but what we have done is increase engagement with our customers tremendously. For example, if we sell them essentials like masks or sanitizer, they really thanked us for bringing it to them. And combine that, we give donations to the hospital and police station and care homes, so that engaged -- that improved the engagement substantially. And new customer acquisition that we did this year has also helped because of essentials that will continue to help for many years to come. So as I mentioned earlier, our growth is not just because of essential. It is because of 4 r's: reach; registration, new customers; repeat purchase; and retention. And we continue to focus on all these 4 levers, and we have a long way to go. Just to give a perspective, QVC's revenue per home in U.S. is about $60. Our revenue per home in U.S. is $3. So we have a long runway in front of us. We are a small player, very nimble and low-cost structure.

So this is a new category for us, the essentials, which we have started, let's say, in the last 2 to 3 months. So if I take the -- if we take a longer view, let's say, 1 to 3 years, would it remain, let's say, in this 15%, 20% range? And whether in terms of gross margins, it would be meeting the company criteria of 60%?

Yes, it is meeting with company criteria. There are some very low margin that we bought for our customer engagement like pasta and rice, when they are hardly 0.1% of sales. But the other essential like board games or coloring books or vitamin supplements or sanitizers and masks, they are giving 60% plus of our revenue margin. So overall, essentials are giving our metrics productivity requirements. So in long run, if they continue, that will be great. But we don't expect the essential to continue 15% or so. We expect the -- other product categories as people become more relaxed. They continue to engage, pick up the productivity, like our lifestyle bags. Right now, people are not buying bags because they're not going outside. So then that sort of start to take up when to start to go outside. The jewelry is more low price point right now. But as the people become more relaxed, they will start to buy a mid-price point -- or a very high price point from us. But we are quite confident of our growth projections that we've given to you.

Okay. And lastly, I think we have been having spectacular results, so good results since last few quarters and years. And so in FY '20, if I include the buyback as well, we almost distributed INR 150 crores in terms of dividends and buybacks, which is almost 80% of PAT and more than 50% of cash flows. And as it was mentioned now that we are looking at a policy of 20%, 30%. So that way, going by the past year, why are we contemplating a decline in the payouts because FY '20 was really fantastic at almost 80% payout to the PAT?

So that's a good question, [ Akash ]. Our endeavor is to have certain cushion of cash in the company if certain opportunity comes our way. Although we are not actively looking for M&A opportunities, but we want to create certain cushion in the case there is an opportunity. But if we don't see opportunity like we didn't see last year, we paid it out. So we'll continue with similar practice in the years to come. This is -- see the opportunity, we'll utilize the cash. Otherwise, we'll pay it out.

We take the next question from the line of [Indiscernible] from Tanisha Capital.

Sir, on the sales through EMI options, how that has performed? And any delinquencies we have faced because of this nervousness in the market?

So our EMI sales is around 40% to 45% of our total sales is on EMI. And during pandemic, since our amounts are so small, so we have not seen any delinquencies during this pandemic. It has been now more than 2 months, and we have not experienced any such thing.

Okay. And do customers...

Only adversity that we experienced was a higher return rate. So that started to come in March, continued in April, but that was towards what people purchased for Q4, and that we have fully accounted for in our books.

Well, well. And on the contracts with the TV broadcasters, how we are seeing any improvement? Or how the negotiations are going on right now, given the weak environment currently?

Yes. So it's -- this is a constant thing that we do, is a constant negotiation that you do or it's a weekly review of all the marketplaces -- of all the marketplaces, we do the weekly review. And wherever we find they are not performing to their potential, we negotiate it down. There's -- or if there's no negotiation, then we exit that marketplace. So overall, it's a continuous review, and we are not seeing any material change in that space.

Okay. But you've mentioned during the initial remarks that we are kind of converging between our web and online e-comm side, be it TV and web are getting converging that way. So given the scale-up of the website, do we foresee any curtailment in terms of TV spends going forward and that will push our EBITDA margin further higher compared to what we are currently reporting?

So for most of the markets, we pay a flat fee of their entire platform. So whether we sell $1 per home through their platform or we sell $10 per home. So it's a flat fee. Some platforms have per home basis as well. So if there is cord-cutting happening on that platform, then that will be reduced. But correspondingly, the OTA is improving rapidly, increasing in the market size. And so that also, we have to pay per home. So that will increase on the other side. So in long run, we are not seeing any material change on air time basis. My comment about converging of TV and platform -- TV and web was to the fact that our business model is such that it covers both the spaces. I'll give you an example. We have an online auction platform within our web, where we start everything on $1 and people compete against each other and they bid against each other. And it reaches whatever price, say, $1 starting, reaches, say, $15, or $20. But there is mostly the exit of our TV product. So the small tails or dogs, which are not doing well on television, not worth the air time, so that we liquidate through this model. So that means the web and television is very symbiotic. And also on the web, we have a TV streaming. So all the TV stream is streamed through web. And there's a good amount of revenue coming through that channel as well. When there's a TV broadcast seen by people who don't have cable subscription or, say, some people have a subscription, they refer to their daughter or their sister in other -- another city where they don't see our cable, and they would consume it via web. But there is, again, symbiotic between television and web. Now the third is STC platform on web. For that, we constantly promote on our television. There's a discount on web. The TV host will encourage customers to go on web and take advantage of a promotion. So again, there's a continuous convergence of these models, and there's a symbiotic relationship between the 2 models.

Right. And lastly, on the U.S. household data you pointed out just a bit earlier. Is there any category you are focusing on or is the entire household universe for the U.S. and U.K. that you kind of indicating, is a specific, say, urban or rural or some portion of the U.S. market, which is more relevant to you or it's broad-based household you are indicating?

So for our television for signal, it is uniform all across the U.S. So you must source the product, which is suitable for the large population of the U.S. So where we have the ability to geographically segment the product feed, we have the ability, but we haven't really fully utilized the segmentation yet. There is offering right now. We are investing our resources in that space, but we haven't taken advantage of the capability yet.

So basically, the cable household would be a good number to start with for us in terms of number of cable connections per household in U.S. that will give a broad indication what you mentioned about $30 versus $3 we are at right now.

So $3 versus $50, that is correct. So that will be a good indicator. Now you have to take into account the paid cable as well as unpaid OTA market, both are addressable for us. So cable paid homes are going down slowly, but OTAs are coming up year-over-year.

And we take the next question from the line of [Indiscernible] from [Indiscernible].

I have two questions. One is that our B2B sales have gone down to almost negligible levels. Are we to understand that the -- it is no longer a focused business for us and these are the levels that the B2B revenues will continue forever?

Yes. So B2B is still, as Vineet mentioned, it is opportunistic for us. And when we look at opportunity or we need to exit setting product line, for example. So if you buy from auction or some semiprecious material, and we are certain grades for that, the rest will exit into this opportunistic market. They already exited the B2B sales to Macy's or to Evine or to QVC that we used to sell. So that business has been exited. But there are certain customers like QVC Germany, or 123 Television or certain other television markets -- the television companies that we sell directly from our India or China offices. So that will come, they will continue for -- if that continues to offer us appropriate ROI.

So it may not go up much from the current quarter's level?

So we don't foresee at this time.

Right. So that was one. Secondly, sir, you have just opened -- I just saw your Shop LC on Instagram. So what's the initial response of customers on this channel?

So Instagram is a great initiative. Thanks for asking that question. So we started about 5, 6 months ago, influencer program on [Indiscernible]. So we partnered with a platform called, Pixel. Pixel has about 250,000 influencer registered on Pixel platform. And our team is reaching out to hundreds of those influencers to post our product to get followers. So that for some of the influences, we have to send our box to them of product free of charge, and then they take the picture of that jewelry or accessory on them and they post to the followers. And they get the box for free in return. Some influencers are for revenue sharing. So whatever the revenue they will generate, we will share better winning with them. So that is a very exciting platform for future growth. We also contracted another platform called, TV Page. That also has [indiscernible] and influencers linked to the platform, whom we can tap for our growth of the business. So far, the revenue is small. But this offers much exciting avenues for our company's future growth, and we are dedicated people, both in U.S. and U.K. for their platform to take forward and very capable people.

Okay. And what about TikTok, sir?

We have not done anything on TikTok yet. It is still a new platform for us, Instagram and Facebook, and we want to leverage that and get a traction there before we take up any new platform. But thanks for the suggestion, Ashish. I'll keep that mind.

TikTok [Foreign Language] 1 minute video. And I think it is a really buzzing platform from the low price point merchandise point of view.

Yes. So TikTok is very popular in India and China. U.S. has not -- U.S. and U.K. has not caught up as much as Instagram or Facebook. But we'll definitely explore that. Thanks for sharing.

The next question is from the line of [Indiscernible] from [Indiscernible]

A couple of questions on Q4 results. And then probably, I'll go to FY '20 results. Q4, so if you can quantify the impact of COVID-19 in terms of revenue or in terms of EBITDA that would be helpful because I see that there has been some impact in terms of margins, gross margins have come down from a quarterly run rate. And also, the EBITDA margin is not up to the mark, if I see. So if you can quantify the impact of COVID-19?

So I don't believe we have separately quantified the COVID margin -- COVID impact for the business. But I can give you qualitative information. One is that we paid some extra incentive to our warehouse employees in both U.S. and U.K. to come. So there was $2 per hour and that we paid to them. Anybody else who came for like studio staff or IT staff or some merchandising staff who came into our buildings, we paid extra incentives to them both in the U.S. and U.K. I don't have exact number how much that spend was. Second thing is the return rate increase that Vineet mentioned and gave color on, both in U.S. and U.K., the return rate increased in March and April that we accounted for all in Q4 because whatever was accounted -- whatever return came for that period be accounted for as per the standards. I don't have exact numbers, but what I can share with you is that current financial year or even current quarter, we'll see 15% to 17% constant currency growth for both combined businesses and the corresponding leverage of the business and minimum 60% gross margins.

So maybe to add, Sunil, like we don't see an EBITDA growth decline in the quarter. So Q4 EBITDA growth year-on-year was 29%, which is quite similar to the earlier quarter. So while we see a return impact, but we have been managed well to offset by our cost optimization, which we launched in the last quarter, and we don't see an EBITDA impact.

That's fine. I just meant that if I adjust for the Ind-AS impact, your EBITDA margin for the quarter is 10.4%, vis-à-vis the run rate of last 3 quarters of around 15%, 13%, much higher. So that was -- I thought that may be some impact due to COVID-19.

Part of the margin is also seasonal. So if you look at Q4 over Q4 of last year, we did expand by about 120 basis points in terms of margin. And even if we adjust the lease impact out of it, I guess, the margin expansion is still 100 basis points in the quarter.

Sure. My second question on the consumer behavior. As Sunil mentioned that there are almost 250 essential items that you have rolled out and the consumer -- customer engagement has been terrific. Is that something to do with the gross margin dip -- a little bit of dip that we have seen in the quarter because most of these items would be, I guess, credit, if not manufactured. Is that a correct understanding?

As I mentioned earlier also that our gross margin on essential as a category is 60% plus, similar to our overall business requirement. So the essential has not impacted the gross margin as such. What might have impacted in Q4 slightly was that we ran clearance in both U.S. and U.K., and we discounted products slightly more owing to the environment. And our essential has not landed with us at the time. So they landed -- started landing with us. So some essentials had landed, especially in U.K. U.S. started seeing some essentials coming in to us around towards really far end of quarter. So essential didn't impact but extra discounting in jewelry to keep the momentum going.

Okay. On the guidance of 15% to 17% constant currency growth, your FY '20 B2C revenue growth that I see is 15% approx, and if I remove the currency part, what is your average [indiscernible] if I may ask?

So as I mentioned, in U.S., we grew, I believe, 13% for the full year and 19% for full year in constant currency basis. Yes, 13% in U.S. and 19% in U.K. in pound terms.

Yes. I think it's -- I think that's approximately 14%, 14.5%, I guess.

So it depends on what currency you put in. If you're putting U.S. dollar, it probably will be around 14%. If you put in pounds, it be probably around 15%. Because pound devalued against dollars. And if you convert them in rupees, it was 15.1% growth year-over-year for the B2C element.

Yes, 15.1%. So my question was 15% to 17% constant currency growth that we are guiding, is it volume led, or is it ASP led anything you want to put a color on that?

So we don't want to emphasize too much on our volume because, as I mentioned earlier, we'll let the customer dictate what they want to pull in at any given time. And we are very agile in terms of bringing the right product, what customers are looking for as we demonstrated with essentials in our -- in Q4 and now coming in current quarter. So it may move a little bit. So I would encourage you to look at in total terms of dollar revenue in constant currency terms. So for your -- if you want to create a model and if your model is volume led, I'll enraged you to look at the model of whatever average price point of last year was. So from a model perspective, the volume and revenue increase will be same.

The reason why I asked is your ASP is actually seeing a dramatic increase, especially if I look at the TV base, almost touching $13, $29, $30. So do I expect it to remain in the same range or [Indiscernible]?

So current quarter, the ASP is lower than what you saw in last quarter or last year because of essentials. But again, I don't want to give guidance on ASP, what I expect -- I will request you to keep the total overall margin by 17% plus and the revenue growth of 15% to 17% at same ASP as last year.

Sure. Last question on the net addition of customers, unique customers, if you can just provide for the quarter and full year?

So I shared the total year numbers with you, but quarter number, Vineet, do you have the data in front of you? So year number I shared was 351,915 in -- from this financial year 2019/'20 versus 342,517 in FY '19. So there was an increase of approximately 20,000 customers.

Yes. So the unique customers increased by about 6.6% for the quarter.

For quarter.

For FY '20.

6.6%. And if you can help me with the number in Q4 FY '19, so that I can get the Q4 FY '20?

So our unique customers for Q4 FY '20 was 178,000. And that for Q4 FY '19 was 167,000.

So one thing to keep in mind that we gave unique numbers in trailing 12-month basis. So even for the 361,915 number is trailing 12 months. So even when we give -- this is the end of the year, so it doesn't matter. But even for next quarter when we give this number, is on trailing 12-month basis.

We take the next question from the line of [Indiscernible] from [Indiscernible] Securities.

First of all for congratulations for excellent set of numbers. My first question would be, sir, how do you see -- do you see any change in consumption pattern given the current pandemic situation? And given the fact that approximately 70% of the revenue is generated from the fashion jewelry items, despite the fact, even though we have 15%, 20% coming from this essential category, but how do we see it because you're already projecting a growth of 15%, 20%? Sir, second question would -- so if you could just answer the first one.

Yes. So as I mentioned earlier also, we are seeing a good traction on the lower price point jewelry and accessories. So for example, there are many in jewelry that people want a faith jewelry right now. Crosses or rosary has started to sell very well, or jewelry with love, affection, like charm bracelets and jewelry which is family denominated has started to sell that. So since we are very agile, we go with what the customer is looking for, and we get to the customers very rapidly. So this kind of jewelry -- emotional jewelry is doing very well. The investment pieces are not doing very well right now. So we have reduced the time devoted to that kind of product. So lower price point and mid price points are doing well. And if the economy goes back to a strong footing, we'll bring those higher price points back up again and bring those handbags back up again. Handbags are not selling right now. Earrings are selling very well because people are doing the Zoom meetings. So earrings are visible, but not as much as, say, rings because rings are not as visible on Zoom meeting.

Okay. Okay, sir. Sir, just a question on this. So the low price products in jewelry items, they have a similar margin as that of the high-priced product.

Correct. They have similar amount.

Okay. And just one last question. That is on the supply chain side. You said that you have supply issues in India due to the lockdown. So that was partly offset by other subsidiaries, say, in Indonesia, China and other places. So are these subsidiaries exactly complementary to each other? So if one is not able to supply anything, that could be compensated by other subsidiaries? Or how do we look at that?

Yes. So we are able to source from those countries as well from an outside vendors level. Only India is our own factory. Rest all these 3 locations are outsourced model. So we can source products that are suitable for customers at that time. They don't replicate exactly, but our agile business model allows us to modify the product offering to the customer. If we were selling Parle-G biscuits, then it will be difficult. But we are very agile in terms of what we can offer to the customer at a certain point. Just to give you an example, the essential like sanitizers, masks or board games, these kind of products came in from China during pandemic. And that all did very well for us. And a product like turmeric or Amla powder or cinnamon powder that came from India. Even during lockdown, we were able to ship those products because they were essential products. We will ship them from India, and that did very well for us. So we are very agile in terms of the product customer needs, and we are able to modify our offering based on what they're needing and what we are offering.

Okay. And so just a repeat question. So even in the outsourcing, when -- while you outsource products from these other factories, you enjoy a similar kind of margin? On the margin that was...

Correct. We do.

We take the next question from the line of [Indiscernible] from [Indiscernible] Capital.

Just a clarification on the essential products, which you introduced this quarter. You say that contributed around 15% of total revenue in 4Q.

Correct. Not Q4, I'm sorry. Q4 was just about 3% to 4%. But that is current run rate. So in current run rate.

Current run rate is around 15%. Okay. Okay. So adjusting -- even if I adjust that growth will be slightly lower, not materially lower. Okay. That's all.

We are very confident of 15% to 17% growth in current quarter and 10 financial year or even midterm, next 2 to 3 years as well.

We take the next question from the line of [ Mukesh ] from [ Lucky Investment ].

So just a clarification. You mentioned that the web growth rate will be 25%, e-comm growth rate when you're mentioning, e-com growth rate 25%. So that refers to the web, right?

Correct.

So in this, the portal and everything will get included, right? The marketplaces, the social media portals, everything will be included here, right, as e-com growth rate?

Correct. And this is a minimum that we expect, even north of 25%.

Okay. And my second clarification is you were mentioning 1 figure of $60 per household, and you are at $3 per household, I couldn't catch what you were actually referring to.

So QVC's revenue is about $60 per household. QVC U.S. and Shop LC U.S. is about $3 per home.

Okay. Understood. But let's say, in the jewelry category, any further breakdown, if possible, where in jewelry category, how they would be and how we would be stacked up?

We do not know the exact jewelry number, but we are mostly looking at per minute revenue because our customer would respond to what products we offer or they offer. They are giving, say, 5% of their time to jewelry, you can't extrapolate that to 100% of your time.

So now you're referring to per minute revenue. And what is the difference there between us and QVC?

So, no, $60 per home per year revenue.

But $60 is per household per year?

Yes. And we have $3 per household per year.

Anyone in the middle between you 2, any other players? And what would be statistic?

So Evine and JTV are approximately $10 per household per year.

I missed the first name. Evine?

Evine. That is -- they're called ShopHQ in U.S.

ShopHQ. And what do they sell?

So they sell a lot of watches, jewelries. So 40% of the revenue comes from jewelry and watches and rest of them come from beauty and other stuff. They call iMedia Brands. So we can look -- there are publicly listed, iMedia Brands.

iMedia Brands.

Yes. And QVC is called Qurate. I'm sure you already have the information on them. And the third is the Jewelry Television, that's a private company.

Yes. That's a brand name.

Yes. So their revenue is between $500 million to $600 million revenue. And so I would say they're about $8 because they broadcast to similar number of homes as we do in the U.S.

But JTV is purely jewelry, right?

They are purely jewelry. Yes. So they're purely jewelry. They're between $500 million to $600 million revenue from about 75 million, 80 million homes that they must be broadcast into or they will make it about $7.50 only from jewelry.

Okay. And iMedia would do jewelry and...

So their jewelry, watches is about 43% of their revenue and rest is other products.

And they are also about $700 million, right?

So they were about $600 million as of last year. Recent quarter, they declined the revenue substantially because they had a change in ownership and new owners could not really run nice well. So they reduced the revenue run rate quite substantially.

Next question is from the line of Pulkit Singhal from Motilal Oswal Asset Management.

Congrats on a good set of numbers. Just strategically, I mean, that chart was interesting that you show in the FY '16 to FY '20 kind of transition on product mix, on channel mix, et cetera. So just trying to take that forward to, say, the next 4 or 5 years. Would it be fair to say that jewelry as a proportion could actually come back from say, 78% for the full year to 50% to 60%-odd or 55%-odd in the next 5 years? I mean continuing the same trend as what you see in the U.S.

Pulkit, projecting for 5 years for product mix is difficult for us. As I mentioned earlier, we let the product earn its space in terms of metrics productivity ratios we have in place. So we constantly monitor the metrics productivity ratio for hourly basis and on the product category basis and buyer basis...

Sir, this is the operators, sorry to interrupt, but your audio is not very audible, sir?

Okay. Let me increase the volume. Sorry, I'm on mobile phone from U.S., so it may not be as clear.

So your audio is sounding very muffled. Hello?

I'm able to understand. I don't know about the others.

Yes, even I'm able to hear that. So Sunil, you can go ahead, you are very clear.

Okay. Sure. Janet, your audio is not sometimes clear to me also. All right. So what I was saying, Pulkit, is that we let the product category earn space in terms of our gross margin and also in terms of metrics productivity ratio per minute that we calculate. So I can't project what the ratio will be. But my intuition is that jewelry will slowly decrease as the ratio of total business. But every product that comes in has to find its space in terms of gross margin and productivity ratio.

Absolutely. I mean, I'm coming also from the perspective that in QVC long back, we probably have a higher share of jewelry. And they've also somehow found July to be a lower part of the mix as we stand, and think over the last 15, 20 years. And to that extent, the consumer pull has been towards some of the other categories as well. So it seems just looking at your last 5 years, next 5 that will go down, but I just thought I'll get your comment on that.

Yes. So that is a good assumption because I remember when I started selling to QVC about 25, 30 years ago, at that time, their jewelry was about 30% -- 30%, 33%. Now that's below 10%. They found the customer acquisition -- new customer acquisition is higher in non-jewelry product. So jewelry, new customer -- jewelry is pretty low in terms of new customer acquisition.

And similarly, considering the same on the channel mix, as your web platform goes up, is it fair to say -- I mean, I understand that many of them may be coming online looking at the TV. But at least for the television we're paying a content cost and for web I'm presuming the content cost of or the cost of that platform will be a lot lower. So does that provide a huge amount of leverage as that share goes up?

Yes. For real time, if the cable cost cutting continues and goes rapidly down, then some contracts that we have on a per home basis or even the fixed contract when we renew them, we renew them lower for the -- based on their home numbers. So that may go down. And some markets like OTA, which are increasing the number of homes, so that will go up. But in the long run, there may be some savings there, but not meaningful. Our benefit will come from leverage afforded to us by revenue growth, where the costs are largely fixed.

Right. But for web the platforms where you said online, there's no content cost out there. I mean, or very limited content cost, unlike a TV channel.

Except their marketing cost, the customer acquisition cost is there. For new customer acquisition, for example, if you're doing digital ads, the display ads or PPC campaigns, where we have to pay per customer acquisition. Marketplaces, we have to pay as a percentage of revenue, or say, influencers as that business increases, there's a percentage of revenue that will be given to them.

And that would be lower than your current pay TV content cost? I mean, whatever percentage of revenues are going out, is it a higher-margin channel is what I'm just trying to understand.

So it goes different. For example, social DR that we just started recently a few months ago, there the advertising revenue to Facebook is slightly higher because is starting up right now. But as we scale up, as we understand the business, it will go down. So there is a potential for leverage, additional leverage care.

Okay. And next question, I mean your constant currency growth has been 14% to 16% in FY '20. But I mean the depreciation of dollar to INR has been around 7% to 8%. So why are we not being able to see that in the INR revenue growth? I mean why is that not coming to 20%, 22%?

The pound has devalued against dollars and rupee -- against dollar. So when you look at rupee to pound, the INR has not devalued against pound. So there is a [ non-lenience ].

So it completely offset the benefit from dollar, INR...

I don't have exact numbers, but maybe Vineet can do it later and share with you. So to some extent, and some of the various B2B sales have decreased year-over-year, that's why you don't see our total revenue going that up much.

Right. Sir, last question, I mean, the companies have been giving us an idea of how mask revenue growth has been because that is kind of like a one-off, and they have indicated as to how April and May is going. So if you could mention, at least how Jan-Feb together versus March was so that we know what the run rate is and how April and May are showing up.

So I don't have that number, but I remember March for the U.S. was about flat, slightly higher than last year. And U.K., March was about 15% growth year-over-year. But I don't go into these infect numbers. So that is from my memory, I'm telling you.

And April-May have recovered to more or less or higher than the Jan-Feb level?

Correct. They have. As I mentioned in March, so just to give some color on that. In March, we didn't have the new product coming in, in the full flow that we saw in Aril and May, while the return rates were higher. So that was the reason for subdued growth in March.

We take the next question from the line of Aditya Mehta from -- individual investor.

Sir, the one side, you are saying that the lower price jewelry items are moving fast. And on the side, we see in the presentation, the average selling price has increased, ASP for our products have increased. How has been this is possible?

The change will be reflected in current quarter, Aditya. In Q3, as I mentioned, our new product inflow didn't fully come at that time. So we continue to sell in March. And in January-February it was business as usual.

Okay. So in current quarter, we are expecting our ASP to come down?

Yes, to some extent.

Okay. And just 1 more thing. Could you give up the backup between jewelry and lifestyle products in Q4, especially for Q4 only?

Yes. Vineet, can you share that number? If you have it?

Yes. Just one second. So jewelry sales in Q4 was 78%. So lifestyle was 22%.

Same as the annual figures. And one more thing regarding the finance cost, though, it is a very small number, around INR 4 crores per quarter, it has doubled APC to the previous quarter. How is it possible even though the borrowing has remained the same?

So a part -- because of the accounting standard, a part of the exchange loss on the dollar loan is reclassed this finance cost. And also because of the Ind-AS accounting standard, which we mentioned, so we get a little benefit in EBITDA, but that get partly compensated in this finance cost in the form of accounting standard reclass of interest for the leases. So these 2 reclassification, if you remove that, our finance cost is almost flat year-on-year.

We take the next question from the line of Ritesh, individual investor.

Congratulations on a very good set of numbers. Sir, my question is, in your presentation on Page #9, you have mentioned that mobile sales contribute 60% of the web sales. So when I do plain arithmetic, then this mobile sales come somewhere around INR 360 crore of the total sale. I just want to know whether these mobiles are branded mobile like [ Apple ], Samsung and all or these are cheap mobiles, which you are importing from China, Taiwan and all.

So I think you misunderstood this point. The mobile sales means sales through mobile platform. We track desktop and mobile as 2 separate categories of revenue generation.

Okay. So it is like sales through mobile through app also. Fine. Fine. And my other question is, sir, we have approximately INR 63 crores debt in our book. Is there any plan to repay this debt and make our company just debt-free?

So there is working capital debt. So we have a large credit line in India and U.K., and we are utilizing a very small portion of this credit line. And we keep the credit line alive in case we need the financing in the future. So as you'll see, our net cash is -- net debt is negative. So that mean we have substantial cash on our balance sheet, which is a small portion of that.

Fine, sir. Fine. Sir, is there any measures we are taking for reducing costs because our cost structure is like we have a high operating leverage wherein fixed cost is very high. So in case of any eventuality or slowdown in the U.S. or U.K. economy in future, so how are we preparing for that if you are doing something? Can you throw some light on that?

So cost reduction is our constant and we are a very low-cost company compared to other players in the U.S. and U.K. So that's a constant endeavor. And during pandemic, we're trying to be more prudent into the cost. But our large portion of our cost is manpower and airtime. For us, both are kind of fixed because of our business volumes. And also, we took a conscious decision during our lockdown in the China and during our lockdown in India. We paid the salary for people completely without any reduction, even though none of people were able to work, especially the factory worker. So we took the decision and we paid for.

[Operator Instructions] We take the next question from the line of Kapil Banga, individual investor.

So I have two questions related to customer acquisition and customer engagement. The first question is around the unique customers that the company has. Though the numbers has -- numbers have increased as compared to the last year, but given the size of the market, the current market share that VGL has the substantial potential to increase it further? And we are doing customer addition looks below the potential. So are we innovating enough to bring in new customers within the core competencies? And what's the view -- so this customer addition has increased, what's your view on this number going forward?

Sure. Kapil, thank you for your question. So you're right, the market is pretty large. Our principle has been a prudent investment into customer acquisition, unlike many other e-com players, and I have no disrespect for them. They're doing very well. But our strategy has been to prudent investment into new customer acquisition channels, whether it is through television or by acquiring new channel positions or through web marketing, like buying the customers by spending large sums of money. So we look at constantly ROI. For example, I'll give you a breakdown, the TV channel broadcasting cost, we have a cadence already set for every new market that we get in. So we have a cadence of 30 days, 60 days, 90 days, 6 months, 1 year and 1.5 years. If any market don't meet that cadence, then we will have to exit that market. And for example, same for e-com customer acquisition, if a certain market, certain strategy is not working like key word or so display ad is not working, so we'll stop that. So if you were to burn more money, we can probably acquire more customers quickly. But that will be against our business model of constant 15% to 17% growth at EBITDA growth with operating leverage.

Okay. So I had a query more on the product innovation side. So I certainly see that product innovation would -- product pull would result in better customer acquisition rather than incurring more on channel cost or new or recreative marketing programs. So on the product innovation side, the traction could have been better.

Yes. So as I mentioned earlier, we have about 150 new products every day. So there's a lot of energy that goes into bringing new product in. And that is 1 of the key drivers of our revenue growth year-over-year in a competitive market like U.S. and U.K., while other retailers are not doing anywhere close to that.

Okay. Okay. So a second and last question, again, on customer engagement, right? So I keep checking the reviews of top [ LC ] app on the Google Play store on the Apple store. There's not much traction in the downloads of the app and the reviews that have been put though the share of revenue that is coming from mobile app is going up, as mentioned in your presentation. But the number of downloads and the number of reviews are moving at a modest pace.

That's a great observation, Kapil. Thank you for bringing that up. So that is true that the mobile app revenue for us is relatively low compared to total mobile sales. So mobile sales largely from responsive website to browsers compared to the app. So we have put in the initiative recently. Recently, we hired in the CTO, who comes to the 20 years of experience on television and e-commerce space. So he has put in a new vendor and a new team together. And he seems to build the team to accelerate our mobile app as well as mobile engagement with our customers. So in coming years, you will see more robust growth and more rapid downloads in this space. But it will take time. So we don't expect the next quarter, but it will happen in a few quarters down the road a few years down the road.

Okay. So I'll just squeeze in one last question. So the shelter in place in U.S. has led to better growth for entities, which have been providing online platform like your online and TV platforms. So was that a tailwind for you also for the month of April? Or it was business as usual?

To some extent, it was.

Okay. And in the absence of that tailwind going forward as other off-line channels catch up again, you see the growth moderating?

Since we have a lot of initiatives in place that has been there quite some time. We expect those initiatives to play and continue our growth even after this tailwind ends.

[Operator Instructions] Ladies and gentlemen, that was the last question for today. I would now like to hand the conference back to the management for their closing comments. Over to you.

So I want to thank all the participants in the Q4 investor conference call. Once again, I reiterate my immense confidence in our robust business model that does very well in good economy as well as in adverse circumstances as it is currently. Finally, I wish you and your loved ones, lots of health and safety. Feel free to contact Dipti Rajput or CBR, if you have any further questions that we can help you with. Thank you, and goodbye.

Thank you all. Bye-bye.

Ladies and gentlemen, on behalf of Vaibhav Global Limited, we conclude today's conference. Thank you all for joining. You may now disconnect your lines.