Vaibhav Global Limited (VAIBHAVGBL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Vaibhav Global Limited Q4 and FY '21 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Karl Kolah of CDR India. Thank you, and over to you, Mr. Kolah.

Thank you, Janice. Good evening, everyone, and welcome to Vaibhav Global's earnings conference call for the quarter and year ended March 31, 2021. Today, we have with us Mr. Sunil Agrawal, Managing Director; Mr. Vineet Ganeriwala, Group CFO; and Ms. Dipti Rajput, Head, Investor Relations. We will begin the call with opening remarks by Mr. Sunil Agrawal on the business operations, key initiatives, and 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 a Q&A session. 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 we face by the company. A detailed statement and explanation of these risks is included in the earnings presentation, which has been shared with you all earlier. The company does not undertake to update these forward-looking statements publicly. I would now like to invite Mr. Sunil Agrawal to make his opening remarks. Over to you, Sunil.

Thank you, Karl. Good evening, everyone. And thank you for joining us today for Vaibhav Global's Q4 and FY '21 earning call. Before we begin, I hope all of you are keeping safe and healthy given the current rise in infections in India from ongoing pandemic. We at VGL have ensured that all our worldwide employees remain safe from infection. The stringent precautionary protocols are being followed across all our facilities and offices. In addition to our effort to keep everyone safe, we're helping and encouraging all our employees to get vaccinated. Times like these are opportunities to innovate our business model and offering to our consumers. The pandemic has accelerated digital adoption significantly over last year. Customer requirements of product mix also changed with our agile sourcing and omni channel retailing capabilities, we are well placed to leverage such shifts in demand patterns and scale our business rapidly. With another strong quarter in Q4, we closed last financial year on a successful note and positive momentum. Retail revenues, EBITDA and PAT grew at robust 33%, 41% and 41% respectively on Y-o-Y basis. Similarly, FY '21 retail revenues, EBITDA and PAT grew at a robust 31%, 40% and 43%, driven by constant performance in each of the 4 quarters during the year. Gross margins have remained stable, even though the product mix continue to diversify with higher contribution from non-jewelry segments. Operating leverage has expanded EBITDA margins once again now standing at 15% in FY '21 from just about 7%, 5 years ago. Cash flows and return ratios continue to expand as our operations remain steadily accretive. ROE and ROCE came in at 32% and 61%, respectively, on trailing 12-month basis, once again, delivering consistent expansion in FY '21, similar to the last 5 years. Operating cash flows have improved to INR 324 crores and free cash flows came in at INR 268 crores for FY '21. We have recommended a final dividend of INR 1.50 per share of face value of INR 2 each. Besides the interim dividend of INR 17.5 per share of face value of INR 10 each were declared and paid to shareholders in FY '21, so far. Despite these payouts, cash balance on the balance sheet has now increased to INR 468 crore. By remaining closely aligned to the needs of our customers and adapting to the change in demand pattern here in current global pandemic, we're deeply connected with our target markets and onboarded a large number of new customers. Our unique customer grew 38% last year and to cross 0.5 million mark, a significant milestone for this year. As you know, our business model is well integrated vertically, and we have a robust sourcing infrastructure spread across 20 countries. This efficient mechanism allows us flexibility in supply chain, setting down time to market and helping us diversify and expand our product offerings to our customer base in the U.S. and U.K. In recent months, we successfully sourced products needed by our retail customers from different countries to well maneuvering around lockdowns and bottlenecks. In this period, we introduced efficient product ranges and several adjacent product categories that have allowed deeper connect with our target segments in this difficult period. We delivered products that are price competitive, ASPs, while earning gross margins that are higher than larger sized peers. This sharp sourcing capability is a key differentiator for VGL, allowing market and wallet share gains, longer customer retention, and expanding lifetime values from growing number of customers in 2 of the world's largest convection markets of U.S.A. and U.K. Our business is highly technology driven. We, therefore, lay a lot of emphasis on bringing best technology to our business. Towards this end, we're invested in various initiatives like wallet integration, new world-class ERP, product personalization, AI application for various processes and market automation and warehouse robotics. I will now take you through some of the key developments during Q4 FY '21. Shop LC, USA added international marketplaces like Amazon and Walmart Canada to its system. Walmart fulfillment services have been rolled out and advertising has been ramped up on Amazon and eBay. We've built a major upgrade to our Shop LC local OTT app and download the DirecTV broadcast to full HD for approximately 15 million homes. At Shop TJC, we launched a new channel TJC Beauty, which focuses on offering beauty products while providing viewers with expert reviews and [ claims ] in and beauty marketing. The channel believes in a simple philosophy that beauty is for everyone. We recently announced setting up of a 100% subsidiary in Germany's -- Shop LC GmbH. Germany will be third country after U.S. and U.K., where we will be expanding our omnichannel network of TV and wealth. Germany is Europe's largest home trading market to 38 million TV homes, and we are excited about the opportunity this market offers. We're preparing for a rollout and expect to go live in the year-end, this H1. Supported by our value positioning, vertically integral supply chain, agility, and lean cost structure, we are confident of breaking even in Germany within 3 years of rollout. During FY '22, in our Germany operation, we expect the CapEx is about $2 million. And during the first year of operation, we're incurring operating loss of between [ $2 million ] to $5 million. Moving on to engagement framework that drives our business model. The 4R which are, reach; registrations; retention; and repeat purchases. Keeping track of these business drivers help us continue our rapid growth. The reach of our TV networks has about 104 million TV homes at the end of Q4 FY '21 as compared with 99 million homes as of Q4 FY '20. Our digital marketplace reach also continue to expand. New registrations on the trailing 12-month basis came in at INR 3.4 lakhs compared to INR 1.8 lakhs in the same period last year. Customer registrations expanded at a very fast pace in the last year due to dynamic also. As of the end of FY '21, we registered at an average purchase of 27 pieces on a TTM basis by our customers as compared with 30 pieces in March 2020. The decline was due to large denominator of new customers. Our customer retention rate stood at 51.5% on TTM basis, which was higher than 50% of last year. I'm happy to share that Vaibhav Global Limited has moved up to 65th rank in the Fortune India's Next 500 list, from 132nd place last year and 219th place in 2017. This demonstrates our consistent progress and improvement achieved as an organization. We are confident of making continued progress in the coming years as well. At VGL, we did inordinate potential to training and development of our team members. Towards this end, our employees are rending total of 73,000 hours of formal training and learning at an average of about 50 hours per employee in FY '21. First training prepares for our team to excel in his current roles and become ready for next steps of big careers at VGL. This allows us to minimize outside hires for middle and senior roles and highly improves the chances of their success in the current and future roles. VGL's India, U.S., U.K., and China units are now great places to work, certified companies. Giving back to the society is a philosophy we strongly believe in. Our flagship giving program, the one-for-one now has been renamed with Purchase Feeds. Under this program, we have now reached a significant milestone of serving over 50 million meals to underprivileged children in India, U.S., and U.K. over the last 6 years. To conclude, I would like to express my heartfelt appreciation to the entire VGL team who worked hard to make the business as robust and high growth as it is today. To our vendors for their constant support, particularly in these unpredictable times, and to our community partners who give purpose to what we do as retail. We exceeded our guidance of 21% to 23% constant currency revenue growth for FY '21. For the current financial year, we see 15% to 18% retail revenue growth in constant currency in our old geographies of the U.S. and U.K. on elevated base of FY '21. For medium-term of next 2 to 4 years, we are confident of 15% to 17% growth in these two geographies. We also expect to continue to leverage from the old geographies of [ U.S. MVP ] with continued cash accretion. With that, I now hand over to forum to Vineet to discuss financial performance for the period and revenue. Over to you. Vineet.

Thank you, Sunil. Good evening, everyone, and welcome to Vaibhav Global's quarterly earnings call. I hope that you and your loved ones are all safe and keeping well. I will now take you all through our financial performance for the quarter ended and year ended March 31, 2021 in greater detail. Q4 has been another quarter of financial strength for the company. Revenues stood at INR 666 crores, growing by 30% year-on-year -- 34% year-on-year. Retail revenues witnessed robust growth of 33% year-on-year and came in at INR 659 crore. Both our geographies of U.S. and U.K. grew at healthy levels, contributing to the growth. While Shop LC registered a growth of 28.7% year-on-year, Shop TJC grew at 34.7% year-on-year. In FY '21, our overall revenue grew by 27.9% to INR 2,540 crores, while retail revenue increased by 31.1% to INR 2,515 crores. In local currency terms, Shop LC-us recorded a growth of 22.2% for the full year, and Shop TJC U.K. grew by 31.6% year-on-year. TV revenues have grown by 27.9% year-on-year to INR 417 crores and web revenues have grown 43.2% year-on-year to INR 242 crores during Q4. For FY '21, while TV revenues grew by 24.9% year-on-year to INR 1,606 crores, web revenues continue to accelerate by 43.6% year-on-year to INR 909 crores. During FY '21, there has been a sharp uptick in TV web revenues as well as web revenues. And web revenue grew by 43.2% in Q4 and 43.6% in FY '21. TV contributes to about 64% of overall retail revenue with the rest coming from the web segment. TV includes conventional TV and free-to-air channels on OTA platforms. While web includes online purchase on any proprietary website, on our proprietary websites and shopping apps, apart from popular marketplaces and social commerce. We continue to cross-promote our channels to further strengthen our omnichannel sales model. It is clear that nonconventional shopping platforms are gaining ground rapidly, more so since the pandemic started spreading last year. Within the given same work, we continue to gain market share on the back of our differentiated strengths. In FY '21, the contribution to revenue from non-jewelry products came in at 31%, significantly higher than 22% last year. The non-jewelry product segment includes fashion accessories, lifestyle, and essential products. Budget Pay is a unique offering that we provide to our customers. It allows them to buy products on EMI basis and is a value feature for buyers. For FY '21, contribution from Budget Pay revenue came in at 36%. Gross margin came in at 61.2% in Q4 and 62.3% in FY '21. Through various stages of the business cycle and across a growing range of products, we have constantly clogged gross margins above 60%. As Sunil indicated earlier, our diversified and value-centric supply chain enables us to source products and materials at lower prices from micro markets in each geography. It also allows for a shortened turnaround time to get new products to our customers' doorsteps. All these factors contribute to our robust gross margins. EBITDA margin came in at 12.8% in Q4, growing by 70 basis points year-on-year. For FY '21, EBITDA margin stood at 15.3%, having grown by 140 basis points year-on-year. This expansion is driven by operating leverage of existing organizational capabilities. PAT for the quarter stood at INR 56 crore, up by 41.4% year-on-year and INR 272 crore for FY '21 registering a growth of 43% year-on-year. Our business is CapEx-light and supports strong cash accretion and conversion from operating profits. Operating cash flow came in at INR 324 crores and free cash flow came in at INR 268 crores as at end of FY '21. Cash in hand, net of debts, was INR 377 crores as of close of Q4. On a TTM basis, ROCE and ROE were at 61% and 32%, respectively, and have grown significantly and consistently over the last 5 years. During FY '21, CapEx of INR 56 crore was incurred, mainly for investments in newly commissioned solar power projects, studio improvements, warehouse improvements, ERP, mobile upgrades and website upgrades. We remain focused on maintaining balance sheet strength with the framework to invest for future growth in a prudent manner. Our recently launched initiatives, Vaibhav Vistar and Vaibhav Lifestyle Limited, are in sync with this ideology and will prove to be value accretive. The Board has recommended a dividend of INR 1.50 per share, face value of INR 2 each. Besides interim dividend of INR 17.50 per share, face value of INR 10 were declared and paid to shareholders in FY '21. This remains in line with our policy of distributing 20% to 30% of consolidated free cash flow as dividend. To conclude, I would like to reiterate that we have proven our resilience and the efficacy of our business model by sustaining our growth momentum in a tough operating period. We are now focused on delivering healthy reserves on the back of our organizational strengths. With this, we aim to deliver joy to all of our stakeholders on an ongoing basis. With that, I conclude my opening remarks and request the operator to open the forum for questions.

[Operator Instructions] The first question is from the line of Pritesh Chheda from Lucky Investment.

Sir, I have a few observations. One, if you -- our model was supposed to generate the operating leverage from the -- from a certain expense line. Look, I'm very happy with the extent of revenue growth. But when we look at the operating leverage part, some of the expenses that we see have also grown largely in tandem with the sales growth. So do you have any comments there in terms of some of the expense lines, what is happening?

Yes. Vineet, please go ahead.

Thanks, Sunil. I'll take that. So we continue to deliver operating leverage. Our EBITDA margin in Q4 have expanded by 70 basis points. So 12.8% from 12.1% as of Q4 last year. So expenses have increased, but their rate of increase is lower than revenue, and we continue to see operating leverage quarter-after-quarter, year after year. In this particular quarter, maybe a thing to point out is, these Q4 numbers, these EBITDA margins are also after 2 exception payments, one-off COVID bonus payout, which we did in the quarter to reward our employees as a gratitude for their efforts throughout the pandemic. And also some initial OpEx on the Germany company setup, et cetera. So if we exclude these exception items, EBITDA margin for the quarter stands at 13.1%, up by 100 basis points from Q4 of last year. Hence, we continue to see operating leverage.

Are you seeing even a double-digit inflation in your carriage cost?

Shipping expenditure is...

No. Not shipping, sir. The TV carriage cost.

So what you see as a content and broadcasting expenditure in the P&L, like in the financials, includes our carriage cost, includes web marketing and web IT. So it is including these 3 expenditures, which is increasing by about 14% year-on-year. If you look at pure carriage cost out of that, it is increasing by about 3% year-on-year. So it's sort of flattish, it still delivers a lot of operating leverage. The other area of web IT and web marketing is in continued area of investment for us, and we continue to do that.

My second question is, we had said in the press release about launching a separate channel for Beauty, right? Beauty, beauty products.

That is correct.

Any reason for launching it separately and maybe not within the -- within our current platforms? And when these both channels go operational, let's say, the Beauty in U.S. and the separate channels in Germany, what kind of operational EBITDA OpEx that -- or loss that you would see over the next couple of years?

Yes. Let me take that. So the separate beauty channel is only live 4 hours a day compared to 24 hours of the regular new channels. And as you've seen, more the hours we can expand more the revenue we can get as long as we can merchandise that effectively. So that is towards that end. And as beauty channel starts to become more scalable with more customers coming in, we'll expand the time from 4 hours to 8 hours and increase the hours. From Germany point of view, I already gave a guidance -- can you hear us?

Yes, sir. We can hear you now.

Sunil, I couldn't catch your first answers as to why a separate channel?

So because there are only 24 hours available to us on a particular channel, having additional channel usage, additional window to reach our customers. The Beauty channel is live for only 4 hours right now. We'll expand that to 8 or 12 hours as we take this -- as it becomes profitable and queues up. As far Germany is concerned, as I mentioned in my opening remarks, the first-year operating losses we expect somewhere is between $3 million to $5 million, and we expect it to become profitable within 3 years of launch.

Will you incur any operating loss on the Beauty channel?

No. Beauty channel is only profitable.

The next question is from the line of Chintan Sheth from Sameeksha Capital.

And congrats for the strong set of numbers. Sir, a couple of observations on the realization. If I look at it, our value realization was in TV realization for past few quarters, we are seeing a steady upward room for web versus TV. Any thoughts on why that is happening? Is it because of the mix or something? If you can provide the color -- more color, please. And second is on the inventory side, we did a very decent job in containing inventory below 70 days in FY '21. Any particular reason in how should we look at the inventory levels going forward?

Yes. Thank you for your question, Chintan. This is Sunil. So from the -- our ASP is concerned, we go with what customer pulls. They give a reason, we want to be substantially lower than our competitor, but we look at what the customer is pulling. And we -- within our web segment, the clearance and rising auctions, those segments proving a little bit higher ASP for us. So -- and also for TV, we will move within a reason. And if the customer is pulling higher at the price point or he will give that particular growth to gain. Within reason, we want to be completely differentiated in the market being lower than our competitors. And your next question was about inventory. So we want to be very prudent in our inventory management. So we continue to optimize the forward cover days of inventory. And so we -- even for current financial year, we don't expect a multiple growth in both revenue growth targets that we have given. It will be lower than -- lower growth than that. We are not giving specific targets for that, but there will be a leverage from that point of view in the current financial year as well.

The next question is from the line of Vikrant Kashyap from Kedia Securities.

Congrats on very good set of numbers. Sunil, if you can...

Mr. Kashyap, I'm so sorry to interrupt. But your audio is not very audible, sir.

Am I audible right now?

Yes, sir.

Yes. Congrats on a very good set of numbers. I would request you to please provide more color on our investments in Germany, how much investment we have made, what's our target investment in the current year? When you're going to launch our TV channel in Germany? How you're going to progress over there? And also, you can just speak about your strategy in Canada?

Sure, Vikrant. Thank you for your comment. From Germany point of view, we expect to invest just about $2 million in CapEx. And our current -- we already launched digitally, so we can buy today, if you want, on the digital platform. On the TV side, we will launch within this half H1 as we guided. And from the operating -- from sales revenue point, on the 16% to 18% revenue growth in our guidance that we've given for constant currency terms, it was only for U.S., U.K. Germany, revenue will be in addition to that growth. And this is first year, we are not giving a revenue guidance on that yet because we don't know exactly when we launched it. We launched within this H1, but we don't know exact date. So giving you guidance of revenue at this time is too early. From losses point of view, operating losses for first year, it will be between $3 million to $5 million for this financial year.

And sir, when you talk about launch on digital, so are we launching our own website? Or currently, we have launched through other platforms?

Our own website. It's already launched.

We have launched our website. Okay.

Yes. [indiscernible], but not the exact date. [indiscernible]

Okay. And your comments on Canada, how you're going to proceed over there?

In Canada, we don't have a separate channel. We just have shipping facilities from our U.S. channel and more and more Canadian customers buying online, we do not yet have a live TV broadcast into Canada. We are exploring various options for taking live TV feed. But right now, it's only online buying that Canadians can do from our other U.S. channel.

So we -- are you planning to launch TV channel within this year or later?

So we don't have any plans for launching a separate TV broadcast in Canada at this time. It is only TV from the U.S. broadcasting into Canada.

Okay. And coming back to Germany, what will be our sourcing plan? It will be similar to what we have, or do we have different strategy? And are we going to put on our warehouses? And is this cost included in the $2 million CapEx?

Yes. So we've already contracted with various TV providers, cable companies, satellite companies, and we launch within this half. And it will be separate feed, separate team, complete separate operation in Germany and this will cost physically [indiscernible]

And then sourcing strategy?

It's little more return from our own vertical supply chain, i.e. India, Thailand, China, Mali and other 16 countries that we have supply chain footprint.

And focus will be similar, like, most on the jewelry and then return on jewelry?

Correct.

The next question is from the line of Anil Sarin from Centrum Wealth.

First of all, congratulations. You -- I mean, there is a term people use in line performance, but you were just surprising everybody on the upside. So thank you for doing that. I had some questions on -- I mean, first, there was an observation that television growth has speeded up in U.S. This is contrary to the expectation where people say, people are not watching TV and where there is going faster. But somehow, last year, your TV penetration has gone up quite sharply versus the trend of the previous few years in television in America. So any comments you have on that?

Anil, thanks for the question. So TV, when we look at our TV penetration, it's just about $3 per home. Compared to, say, QVC where it is $60 per home. So $60 is TV and web all together. And we are -- our TV and that together is just about $3 per home. So TV itself has tremendous potential for us. Now there's a noise about cost cutting, and that cable and satellite are shutting in homes. But when you look at OTA, as I mentioned earlier in my comment, OTA homes are growing about 3% to 4% every year. OTA is a local broadcast where people can view the signal through antenna. And that is digital. It is much different today than it was 10, 20 years ago. Even the digital program is free and with a better broadcast and many cable or satellite. So that segment for us is growing very rapidly. Even on cable and satellite, per home revenue for us is growing because of our better programming, product mix, better selling co-hosting and lot of learning that we have done over the years where we're applying. And so we have a lot of runway in front of us even within TV satellite.

Okay. Great. That's nice to know. And also, it's very good that you've opened up another front in Germany. Hopefully, in a few years, Japan should follow, as you had mentioned in your earlier call some time ago. So that's again very, very complementary. However, I mean, when I see you're -- on your digital front, though you have been proactive in chasing all the social marketing, social commerce et cetera. But when I see your followers on Instagram, et cetera, that's not something very, very large. I mean there are singers, there are other people who have like many clients are kind of followers which you have. So is there some scope for improvement over there? Or is this by design?

Yes. So we have a certain investment philosophy from a digital point of view. And that philosophy is that drives us. And our philosophy is that we make the investment in a method that is not validated to the overall business. And we have leverage -- operating leverage to the business. We have made certain investments this -- last quarter, and we'll continue to grow the investments in coming 2 years as well. And with that, we'll continue to grow our following in Facebook as well as Instagram. And besides these social platforms, we are also moving through marketplaces as well. And we're seeing significant growth in marketplaces in the last financial year. So all in all, our growth in digital will continue to outpace our to be growth in financial liquidity too and even beyond.

Okay. Great. And in terms of delivery, I mean you had a plan to shorten the delivery time, both in the U.S. as well as U.K. So if you can give us a status update on that.

Sure. So U.K., we have significantly reduced our delivery time, especially with TJC PLUS, which is similar to a one time. Our delivery time is approximately 24 hours from the period of dispatch. Whereas in the U.S., during the pandemic, there was a lot of bottlenecks from shipping companies, and there was a delay. So with that, we have not been able to shorten delivery time in the U.S. We have -- in some portions like in Texas and Oklahoma, our delivery times have shortened to just about 1.5 days compared to 5 days earlier, because we've made some agreement with different carriers. In different parts of the U.S., we are negotiating our top and different carriers to reduce our delivery time from current 4.8 days, down to 3.4 years. So we -- in financial year '22, we hope to see our delivery time in the U.S. reduced by about 1.5 days as well.

The next question is from the line of Dhaval Dama from Motilal Oswal AMC.

Sir, just wanted to understand now, like you mentioned that Germany, next year, there could be some OpEx losses that we could incur. So basically, and you are talking about breakeven also happening in a couple of years' time. So would it be fair to assume that even with a higher revenue growth at a company level, we might not see the expected operating leverage? Or are we missing anything on that account?

So we'll see operating leverage in U.S. and U.K. as I mentioned in my opening remarks. The German initial losses will be diluted in coming 2 or 3 years. We are hoping that overall in the company, we would see or -- we add the revenue growth, but we will be at least -- and that will be our endeavor. But Germany is still very new. We are not giving overall operating leverage guidance as of now. But definitely within U.S. and U.K., we will have better leverage.

And sir, like, if you look at it, one more thing that I wanted to ask you now, if you look at it during the current year, obviously, online channel has done -- done well for most of the players globally also because of the current situation. Now with U.S. and U.K. vaccinations and everything picking up faster as compared to the rest of the world, do you see that, there could be some slowdown in terms of growth over there? Or how do you see that channel panning out over the next couple of years?

Yes, Dhaval we -- for the current quarter, we are just about 6 weeks into the quarter. We are seeing -- we are continuing to see elevated growth of similar [ demography ] but given that the economy will become [indiscernible] in the U.S. and U.K. We are giving our guidance of 16% to 18%, which is even higher than already last quarter, we gave 15% to 17% guideline. We omit a little bit, but we are confident of achieving 16% to 18% guidance of growth in the U.S. and U.K. on constant currency basis in the current financial year, even accounting for opening up of these countries.

The next question is from the line of Runjhun Jain from Nirmal Bang.

Just one, two clarifications. For the debt, we have seen that has increased from September as well as in the March last year despite your holding cash. So any reason why we're carrying -- and sir, the debt has increased during this last 6 months?

I'll take that one, Sunil. So Runjhun, the debt from last year has increased on account of PPP loan. So we were eligible for the paycheck protection program loan in U.S. and we have taken that loan. That's about $4 million, which is right now standing as a loan in the books of accounts. We have already filed our application for forgiveness as per the rules of the scheme, but we have not yet received -- we are not yet audited for that. And hence, we are right now showing it as a loan. That's the primary reason. You see an increase of borrowings from last year versus this year. As for quarter-on-quarter, the working capital limit, it's largely of India unit, which is a sourcing and supplying unit to the U.S. and U.K. channels. The working capital requirement varies from quarter-to-quarter depending on the orders and the production plan for the quarter.

Okay. Sir, I didn't get the point you gave, saying that the loan you've taken in the U.S. So you have applied for what? Sorry I missed.

So U.S. had a program rolled out called PPP, Paycheck Protection Program. So this was one of the schemes during the pandemic, so in which many micro enterprises and medium enterprises, the government has offered loans, which were later to be forgiven. We were eligible to take that. So we had taken that loan of $4 million, that standing is a borrowing in our balance sheet right now. We have already submitted the application for forgiveness, but there is a process to it. The SBA U.S., they will have it audited and see our compliance to all the conditions. And accordingly, they will grant the forgiveness. The amount was USD 4.8 million and not $4 million to be precise. So we are not yet audited. We have filed the application for forgiveness. Once it is approved, it will be taken as a grant in our books. Till then it is standing as our borrowing.

Sir, you were talking about that there is a onetime bonus you have given to the employees during the quarter for the COVID. So is it possible for you to quantify that amount?

So that's about INR 1.3 crores.

Okay. And lastly, sir, is there any one-off in the other income because that it looks due to some [ air ] on this quarter?

So there is no one-off, but yes, ForEx fluctuation gain is sitting in that other income. So that has increased.

Okay. Understood this. Just one clarification, sorry. About the Germany, what you're saying is that right now, you have launched a digital platform on the website of your own. And you have probably invested around $3 million for the state, and you would be launching in the first half your TV launch, you're planning to do that in first half. So what kind of investment you're looking for that platform?

Sunil, you want to take this one.

Yes, this is Sunil. So total investment in this financial year in Germany will be about $2 million in the CapEx investment. Including the website, including the new offices and new studio we're building. All together will be about $2 million, this financial year. The operating losses will take in first year due to scaling up that is required for this kind of business will be between $3 million to $5 million. So that will be diluted to the overall earning but as I mentioned, we'll have 16% to 18% revenue growth on the top of our elevated growth of FY '21 with operating leverage from the U.S. and U.K. So we are hoping that that operating leverage will be sufficient to offset the value to reflect on Germany. On overall revenue basis, we will not be dilutive, but will be -- will have leverage or at least at similar growth as the top line revenue. Now top line revenue, 16% to 18% is only U.S. U.K., Germany will be added to that in the top line revenue overall. So when we say in general amount we say, $100, then the 15% to 18% for U.S. U.K. plus Germany revenue will be the top line revenue growth. And the bottom line, we are hopeful will stay in line, at least stay in line with the total revenue growth. Runjhun is it clear or this is complicated -- this is a little bit completed.

The next question is from the line of Yash Joglekar from AMBIT Capital.

So I just wanted to ask a few questions. So during the fiscal year, we have acquired an intangible asset of about INR 26 crores. So what exactly is this intangible asset acquired for, if you could just shed some light on that?

I'll take that one, Sunil. So intangible assets include basically all software. So we rolled out our ERP across all the geographies. So that is sitting into it because our -- besides our U.S. website, we are moving from SAB hybrids to sales force, a part of that expenditure and also all the mobile app developments, et cetera, which Sunil also mentioned in his opening remarks. So all these are forming part of that intangible assets under development.

And that has been reflected in the intangible WIP line item?

That's right.

Okay. And also, if we see the other expense as a line item for the fiscal year, there has been roughly around 37% year-on-year increase. So where exactly is Vaibhav incurring these expenses.

You were talking -- if other expenditure would largely increase all these SG&A expenditure. SG&A expenditure, again, 40% to 45% of those costs are variable in nature or semi variable, if I may call it that way. And the rest 50% to 55% expenditures are sort of fixed in nature. So variable would include shipping, shipping expenditures vary with respect to revenue. In fact, right now, we are investing in faster shipping delivery. Hence, they are increasing at a slightly faster rate. The fixed expenditures would include kind of airtime broadcasting and those kind of expenditures.

Okay. So like are we spending a bit more on the advertisement part or something like that? Is it right to infer in that way?

We are spending more on shipping. So shipping right now is increasing at a rate of about 60% year-on-year. So that's higher spend. We are investing in faster shipping, and we want to go -- continue going that route, as Sunil also mentioned. Our levels of rest of the variable expenditure in terms of credit card, et cetera, are pretty much in line with the revenue growth. We are able to save a bit in call center and their marketing growth and their IT expenditures are also increasing in line with our company strategy. Overall, put together, so web marketing, web IT, and shipping are increasing in line with our growth strategies. And airtime, which is the carriage cost, broadcasting cost is more or less a stable kind of expenditure right now, and other G&A costs, which are actually flattish year-on-year.

Okay. And it seemed that you mentioned that you guys are shifting your software from hybrids to some sales force. Is that right?

That's right.

So will we again experience some problems in the customer experience part, like we experienced in FY '16, '17?

Sunil, you want to take this one.

Yes, I'll take that. Yes, I'll take that. So this is Sunil. So in Fiscal '16 -- '15, '16. So we have experienced some difficulty. But our IT team is of much higher caliber with a lot of experience. And we've also made substantial investment to make sure that our customers and our company do not face any such issue. So in all our expectation that we have ever today we don't expect any disruption in the customer experience and our revenue growth.

Okay. Okay. And the second question was regarding the Germany expansion. So what sort of competition space is currently prevalent over there? Like is it somewhat similar to U.S., U.K.?

Yes, very similar to U.S. and UK. Similar players are presented there. There are 2 major players of about $1 billion each CVC and HFC, and a few smaller players. So very similar to U.S., I would say.

The next question is from the line of Ram Modi from Prabhudas Lilladher.

I just wanted to ask is more of a strategic question. Sunil, if we continue to grow at almost 13% to 15% cash or there about, what kind of operating leverage which we can expect over next 4 to 5 years? Germany may come in 2 years, 3 years. But what would be -- if we are looking at currently at around 15% margins, what would be our aspirational margin in this site?

I'll answer the question 1. We don't give guidance on operating leverage. But constantly, because the reason is because we are still treating ourselves as a start-up in those markets. And we constantly look at the investment opportunities available to us. So we make investments in a way that we will continue to grow double digits or at least the guidance that we have given and higher than that. So we make the investments, but whilst keeping the operating leverage continued for foreseeable future. So we are not giving great guidance, but we will continue to see those leverages coming in.

Okay. So I mean, sir should we kind of build-in at least some leverage over the next 2, 3 years, so that as we grow in scale, that will definitely get reflected in markets?

Correct. That is what our expectation is.

Okay. Sunil, another question was we used to mention Japan as we had started on Germany. And I just wanted to check on where are we -- we had thought that Japan is a mixed new market. So where are we on Japan? And third is another question was on -- even in U.S., how do we move up on the upper ladder of the channel where we can get a higher strike rate will that -- that was also one of the strategies. So where are we on that?

Yes. So Ram, for the Japan, we are already sharing -- showing on the marketplaces like -- markets in -- local markets. So we are extremely understanding that market, and we'll continue that understanding for some time till we get the confident will be the right time for us to go. And also, we don't want to go tell Germany actually stabilize. While Germany stabilizes and we are confident we're sitting on the right growth path, then we will open new front. Coming to your question about loads our position in U.K. So Anil Sarin's question I had said that we have a lot of potential within the -- those TV platforms that we are in. We also have tremendous potential in OTAs over the year through antenna. So there is about 20.3 million homes right now. We are in about just about 1.5 million homes there, out of 20 million homes. And those are positions typically give about 5 to 10x per home revenue than the regular channel we would be having. So we are constantly exploring, expanding in that space. And given the right opportunity available to us will continue to spark. But there's a tremendous potential for us to expand in this space.

And last question, but just was there any regional investments is required to fund this OPA? Or what kind of -- will it be part of our normal CapEx?

It is part of normal APEX. There is no CapEx, yes.

[Operator Instructions] The next question is from the line of Jay Tewani from AQF Advisors.

Can you give us an update on our demographics specifically since we've been investing in social media and influencer marketing? Are we trending younger?

Yes. Jay, for the web customers they are slightly younger than our TV customers, there is no doubt. However, when we target our web customers, we try to target 40-plus demographic female 40-plus demographic, mainly because our product merchandising across our entire supply chain is geared towards that demographic. And why we are focusing on that also besides being manufacturing side? Because we believe if a 40-plus demographic in both U.S. and U.K. and Germany as well has much more disposable income than the younger demographics. As per the data, 62% of disposable income of U.S. is with 50-plus demographics. And they have time in their hand, and they have disposable income. And there is a demographic, we try to address as much as possible. But because of the nature of the platform, the web platform has younger audience than our 2D counting, not by much, but about 8 to 10 years annual demographics.

Understood. My next question is on our repeat purchases. As I see sequentially, it's pretty much flat. Can you update us on what's your strategy to increase this?

So repeat has gone down, as I mentioned in my remarks. So for Q4 FY '21, we were at $27 compared to $30 of Q4 FY '20. So it has gone down, mainly because we had very high growth of unique customers. Now unique customers because of some with primary and some with digital marketing-driven and some with OTA and OTT platform driven. So because of that, this condition. Now as we continue to increase our digital customers, so this rupee may go slightly even lower in the coming years. But the mid customer acquisition will be very high. So where we continue our overall growth rate of 16% to 18% for this financial year and 15 to 17 in constant currency basis for U.S. and U.K. for coming -- for midterm in 2 to 3 years.

The next question is from the line of Bharat Shah from ASK Investment.

Yes. Just one clarification on the Germany foray. So in the first year, we expect operating loss of $3 million to $5 million. And what is the picture ahead thereafter? I mean how are we looking at that?

Bharatbhai, we expect to become profitable within 3 years. First year, we expect digit fee. So this is first financial year for us. And by the third financial year, it will be profitable in the market. This is our traditional path.

Which means even the second year would have operating losses as well?

Yes. We expect second year to continue to operating losses, but at a lower degree than the first, yes.

And the third year in itself, hopefully, may breakeven or return -- recover something from the previous 2-year losses?

Correct. That is correct.

The next question is from the line of Nilesh Shah from Envision Capital.

Sunil and Vineet, congratulations on a great quarter, great year. My questions are in continuation to Germany. I just want to try and understand that given that it's already a $2 billion market and a very large universe of home shoppers, any thoughts in terms of by when would Germany catch up with what U.K. is today? I know, of course, you've just forayed into Germany, but U.K. we're doing currently about $100 million of revenues roughly, INR 700-odd crores. Any thoughts in terms of when do you think we should be able to kind of get to a number like that? And second is by when do you think Germany's margins would kind of way catch-up with the blended margins of the company or the firm as a whole?

Thank you, Nilesh. So Germany is very new for us to give the future guidance -- new guidance as of now. Once we have more traction and we -- we have gone up with numbers internally, but it is still too early to give guidance on that. But German market as such is bigger than U.K. So down the road, we expect Germany to catch up the U.K., it will continue to grow as I have given the guidance and how far Germany can rattle to reset the growth or even exceed that, it is too early to give the guidance. And the market potential is quite strange.

The next question is from the line of [ Manish P from Fiducia Capital. ]

Yes. Excellent set of numbers. So my congratulations to you on that. I wanted some understanding about the way you go about managing your inventory. See, what is the right metric to basically understand how -- because you will have a lot of SKUs, and then there will be a slow-moving element to it. There will be an absolute element to it. So how should you -- and it's a big investment. If you look at your balance sheet, a significant amount of money is invested in the inventory. So how does one understand this piece of the business?

Manish, that's a good question. So we have a very robust process internally for managing inventory. We look at inventory from forward curve basis and aging basis. And we have very aggressive aging cadence. So anything over 90 days, we consider agent and their KPIs of how much aging we can have at each minute. Compared to other retailers, some retailers consider 100 days as aging, some consider as one year as aging. But internally, we have 90 days and at every 90 days to 180 days in provision we take 180 days to 1 year, we takes 7 provision and one year over, we take a very high provision. So that incentivize our teams to let the inventory out of the draw as soon as possible. From overall inventory perspective, we have the forward cover of a basis for our inventory, and we track every week. How much forward cover do we have at each unit, and we try to stay within those forward cover leasing with respective units. Even supply chain also, we have forward cover basis. And even in gemstone units, we have forward cover basis. So there's a lot of attention on mange your inventory at each group unit because we did the inventory, while it is useful for growth of the business has a high cost of management and dilutive impact -- can have dilutive impact on the business. And then we also have clearance a mechanism built into our business model through our rising option as well as clearance cadence in the group. So we have, over the year, we have 5 clearances that are built in during the year. And every day, we have value auction, and we sell in about within 3,000 to 5,000 pieces every day, we're selling in U.S. and about 1,000 pieces or so in U.K. where all the tails left or any slow moving, would put it at $1 or GBP 1 and no result. So people bid against each other and wherever it closes, we give it to the customer. So that constantly clears some inventory at a rapid rate. And this is important, given that we have about 150 new products coming in every day at our retail units. So this clearance mechanism constant is a unique feature to us that keeps our inventory clean and in a good shape cost entry.

Wonderful. Could you just explain as to what did you mean by this forward cover piece? What exactly is it? You mean -- how much...

Yes. It's a good question. So forward cover means, what is our provision of sale of, say, next 3 months? And what is the cost of goods required for the 3 months? So each unit is to look at the forward cover, they will need 50 days or 75 days or 90 days or 120 days of that inventory for forward cover. So for example, at Christmas time, we increase our inventory in before this profile because the forward cover is higher, the sales during Christmas time is higher, so we increase inventory going into Christmas periods. But coming into leap even at summer, the forward cover [indiscernible], will reduce our inventory coming into summer season.

Okay. Wonderful, wonderful. One, I could not hear it clearly that how much has been the investment in Germany already being done?

Can you repeat the question, Manish?

Yes. I mean, I wanted to understand the investment in the German initiative. I mean, how much has been done and what is the total plan? Meaning, was it $10 million or $5 million? I couldn't hear the numbers clearly.

Yes. So the total investment expected in this financial year in Germany CapEx is just about $2 million. So as our business is not CapEx heavy, it is very CapEx light. But first 2 to 3 years is OpEx heavy. So we have higher operating costs in any new geographies, but the CapEx is very limited.

Right. So the amount that is going to be spent in the German initiative will be USD 4 million?

Yes, so $2 million -- so $2 million first year and second year, we would have the CapEx but not $2 million little lower than $2 million. But the OpEx losses for the first year, $3 million to $5 million is what we look at. Because in our business, the CapEx is not very high. And there's a huge operating leverage coming in during future years. As you've seen the last 5 years, we had a continuous operating leverage in the U.S. and U.K. In Germany, also, we expect to have operating leverage coming in within third year.

The next question is from the line of Ashish Kacholia from Lucky Investment.

Congratulations on a great set of numbers. My question basically is, what is our progress on the Instagram marketing front, any metrics and numbers that you can share with us, sir?

So I don't have metrics in center, Ashish, but we have invested as Vineet already mentioned that we invested more on the web marketing last quarter, and we're continuing to see traction from Instagram, from Facebook, from YouTube, all the solution platforms are giving us higher revenue. I don't have exact numbers in front of me. But that is an area of focus, and we continue to invest in this financial year as well.

Okay. And my good wishes to you on Germany. I think it is wonderful that we are kind of seeding a new market of substantial scale and I feel that we should kind of not skim on investment in this -- I mean it may take 2, 3 years for us to build our business, but I think it's wider for our longer-term growth. So my congratulations to you on starting that business and my best wishes going forward.

The next question is from the line of Latika Jetha from Concept Investwell.

So my question is in the IP, you have mentioned that your mission is to provide 1 million meals per day by the end of FY 2031. So if you see currently, the run rate is around 13 million pieces for this financial year. And we are targeting around about USD 355 million by FY '31, which means 40% volume growth every year for the next 10 years. So can you help me, like what is your strategy for this kind of -- how can you achieve this kind of high-volume growth?

Latika, it's a great observation and a good conversation on the math. So first of all, right now, our run rate between -- just between U.S. and U.K. we have about 54,000 meals per day because weekends are not distributed. So 54,000 to 1 million is quite unsound. And this is how we had. And this is a meal we had just good, we brought it together. And this would mean that would have to grow approximately 30%, 32% year-over-year for coming time. For us, the growth might come from Germany that we recently launched, and in the future, we may launch in Japan as well and some digital native brands, B2C brands that we are hoping to launch. So that is a be had for us. We hope to succeed. We aim to succeed, but this is still a goal that we take with a lot of courage and a lot of ambition. And a lot of -- I would say, future centric mindset. Thanks for the question. And this is something that we are taking very personally. Yes. go ahead.

I have one more question. So if I see your packaging and distribution expense has risen up sharply. So I wanted a clarification that is it because of the TJC PLUS membership program because of which this costs have increased substantially?

So part reason is TJC PLUS and part reason is rising Lifestyle Products. So Lifestyle products, TJC PLUS -- yes. So Lifestyle has increased but is a larger thesis. So they have higher shipping costs and faster shipping is also expensive weekly.

The next question is from the line of Astha Jain from Hem Securities.

Yes. So first of all, congratulations on a very strong set of number and the consistency is the main feature which I'm feeling like you have shown strong consistency in the numbers, so again congratulations to [indiscernible] retail for that. So my question is in continuation with the last question only regarding your packaging and distribution costs. So it has shown a increase, significant increase. That's what I've seen over FY '20, FY '21. So I would like to know how this item will behave going forward, this line of items, because I think this is taking major of our expenditure part and that's why, we are not able to see the progress. I mean, as much as we can expect after having such sort of good jump in sales. So just want to have a clarification on this item and its behavior in the future. And the second question is about the commodity. As we noted, commodity prices are rising and some of our items not exactly [Technical Difficulty] commodity prices [Technical Difficulty]

Ma'am, I'm so sorry to interrupt. But your audio is not clearly audible. We are unable to hear you well.

Okay. So my first question is regarding this line of item of your packaging and distribution costs, which have shown a strong drive. So how this item will be going to begin in the future? And second question is about the commodity prices, which has shown significant jump. So does this increase in the commodity prices will really affect our cost of raw material as well as for the [Technical Difficulty] in the coming future?

Yes. Astha, thanks for the questions. So the shipping point of view, our growth, worth the shipping because the volume also increased substantially. So per piece shipping our actual growth has been about 17.5%. So that is largely because of faster shipping and larger LST volume. So from the current year to next year, per piece cost shipping may not go up substantially because the U.K. is already in place where it is. But we still have -- we'll have some growth of per piece costs as well, may not be at the level of 17.5%, but you still be elevated we're trying to offset this cost by increasing our margin slightly. And we have been able to do the successful to do that in both in the U.S. and U.K. to some degree. Because of that, we are able to give the guidance of continued leverage, both in the U.S. and U.K. So again, our aim is to be competitive in current market expectation, where Amazon will be delivering 2 days and 3. So we are going in that direction, and we are making really good investments. And [indiscernible] done successfully in the U.S. also, we are going towards that. Second question was about commodities. It is true that the silver prices and some of the commodity prices are going up. But we value -- we create our margin on the basis of cost. We don't have anything preserved. So it crosses today, say, something like $3, tomorrow it may be $3.50, so we'll add up our margin that we require on the top of that and then offer to our customers. So we always look at that calculation, but I think product should be 60% margins for us or more. And then we back calculate it. And price it accordingly or merchandise it accordingly. So commodity price is not concerning to us, but shipping is an area we constantly watch today.

Okay. And one more question from my side. We had talked about fashion apparel business in our last comfort. So can you just throw light on that part also? How is it proceeding? And if you can comment on that also.

Can you repeat Astha, you were not clear?

I'm saying that on the fashion apparel business, which we have talked in our last con call. So I just want some -- an update on that part also. If you can give me some updates regarding that business because we have talked something on that in the last con call, fashion apparel business.

So fashion apparel is going very rapidly. We are not breaking down individual categories for the projection. But as we expect the overall as a speak segment to grow, and within next 3 years, we expect Lifestyle will need to be almost 50% of our mix. So none during the third year, this financial year, we expect to be 50%. And fashion and apparel will be constituting a good portion of that. So it's growing very well.

The next question is from the line of [ Preetum from well -- Via.com. ]

My question is regarding Maverick insurance. So we had signed up for them last time. So how that is progressing and how the social media marketing, any numbers or leads that were growing. And second is about the Etsy and Wayfair, the new marketplaces that we signed lock upon. So how is the progressing then?

Yes. Preetam, so the CSL program is doing well. It is not going as fast as I would have liked. But the lifetime value and the overall revenue from that is decent. We're trying to scale it up. We feel that there is a lot of potential. We're making investment in our team who can do that. And we hope to see this program accelerate our social penetration. Etsy and Wayfair, they are also -- they both are ramping up as well. Etsy in the U.K., especially ramping up well. Wayfair is still slow, not as much because Wayfair is more like B2B from a vendor perspective. They take the product while we have to keep the product at our end. Our gross margin on Wayfair are not as good as you would like. So ramp on Wayfair is not very well, slightly, but not anywhere close to obviously in Amazon, eBay, and Walmart.

About this influencer program, is this global -- I mean, it is for the only America or all the rest of the territories?

Yes, U.S. and UK. Only 2 territories.

Okay. And about the TJC Beauty separate channel, it seems it is profitable from the start. Do you feel that we will be launching that in other territories also going forward once this become stable or something?

Yes. We would like to see it have for some time before we launch into other territory. U.K. especially has an advantage with that. Their time cost is not tremendously high. So -- and the penetration is just about 25 million homes in the U.K. U.S. is about 100 million homes and airtime costs are substantially higher than [Technical Difficulty]. So we want to go into U.S. after due consideration. And it's still the traction, but we may, there is a potential for products in the future.

The next question is from the line of Bharat Shah from ASK Investments.

Yes, Vineet, while I appreciate there is no operating leverage guidance, but I was just doing a little bit of calculations. So broadly, it looks like to me that if we grow at about 18% to 20% in our top line. And given the fact that our gross margins are in excess of 60% and of the total cost, roughly 55% to 60% is fixed in nature or materially fixed in nature. So that -- what it looks like to me is about 18% to 20% growth should imply a 60 to 80 basis point improvement in margin broadly. That is the way it looks the picture to me. Am I safe in assuming this?

So I'll take that, Sunil. So thank you, Bharatbhai, for the question. So in terms of calculation, you are right in calculating this way, but like we don't want to give any operating margin guidance number as such. But we strongly believe that our nature of business model is such that operating leverage would continue. And given the nature of the fixed or stable kind of expenditure, we should definitely keep on seeing margin expansion. So our variable cost might increase even slightly higher, like we mentioned, shipping cost as well as web marketing costs. So they might increase even more than the revenue increase because we take these areas as our investment areas for future growth strategy. But our overall cost nature would more than offset that, hence, operating leverage would continue, you would not want to put a number to that at this point of time.

Got you. Appreciate it. And on the Germany part of the launch, U.K. and U.S., both are increased speaking and somewhat similar kind of cultural sensitivity and ethos. Germany is a lot different from that point of view. So programs and kind of things that appeal to that audience. I'm sure all that would have been definitely built into our plants. But I just wanted to understand on that. Because the sensitivity of the kind of programs that are done, which will appeal them and create a loyalty so that they visit and be with the programs and buy I suppose it is very critically to our longevity of operation.

Bharatbhai, I'll take that. So we have experience in Germany. So we have launched in 2007. Unfortunately, we faced financial 2008/2009 a deep recession. At that time, we decided to average Germany. But we have that experience. And we also have experience in selling the government market. We still have chosen Germany as our client from India directly. So for the last 15 years, we had in 15, 20 units [indiscernible]. So we have some experience, and we have transferred one of our U.K. senior manager to Germany, who is -- have lived in Germany for 20 years and have been with us and our internal team who are from Europe and U.K. has a lot of them are moving to Germany. So our success potential is very high this time around when compared to 2007, and we are fairly confident of making a good subdual life in Germany.

The next question is from the line of Chintan Sheth from Sameeksha Capital.

Sir, on the fee business, like, if you can pick some numbers how the traction we are seeing there. And you did already mentioned that you are calculating 0 EBITDA [Technical Difficulty] and competing us debating that reduces to 1.5 days over time. What are our plans of similar to this unit plus kind of offering in U.S.? That is one. And second, on the marketplace, revenue for FY '20 we made a target for -- provided last year. Just if you can share what kind of revenue is generated marketplace [Technical Difficulty] in what are the other transition mixed?

Sure. Chintan, I'll take that. So on TJC PLUS in the U.K., about in recent weeks, we are seeing about half of our shipments going under TJC PLUS. And actually, last few weeks, we're seeing that, and which is great for us, and that is helping our repeat purchase and per customer overall lifetime value. And we have seen the lifetime value of that customer TJC PLUS increased double digits with our TJC PLUS. So overall, we have seen this program to be accretive to us. Giving to U.S., we want to bring to the U.S.-only after we have our shipping in control. We are able to ship faster and at a reasonable cost. We are not there in the U.S. at this time to take this program or will it happen in the next 6 months or within beginning year? I don't know. So we don't have full visibility. But once we have that compare of shipping costs and shipping every time, we will take it there. The next question about marketplace. So last financial year, we had about $12.5 million sales coming from marketplaces in FY '21. So there was a rapid growth compared to just about -- I think about $4 million -- $3.5 million to $4 million a year before. So we have a huge rapid growth in marketplace. And there is very highly competitive space given even though we had a good [indiscernible] growth. But a lot of that growth came from our financial products that we were able to offer at that time. But this year, we expect to grow even ahead of that of marketplaces. We are not giving specific guidance on that, but we expect that to be even higher than $12.5 million that we did last year.

We take the next question from the line of Aditya Mehta from -- well, ladies and gentlemen, we just lost the line for the current participant. We take the next question from the line of Yash Joglekar from AMBIT Capital.

Sir, I just wanted to ask you what would be the current NPS score for us and for our peers, let's say, QVC or JTV?

Yes. So thank you for your question, Yash. Our current score in our U.S. business is 70% and the U.K. business 65%. And these scores at other competitors are in the range of 50s and 60s. So we believe that our NPS is higher than our innovate competition. Now you have to keep in mind, this is done mostly internally. So this can -- the methodology can differ from the company to company because it's not done by third party, and there is no stranded perfect definition of the question that [indiscernible]. So what we look at is, are we growing year-over-year? And are we improving our customer experience in terms of the pit pressure and retention rate. So those are all combined, if we look at overall customer engagement. Did I answer your question, Yash?

Sir, we've lost the line for the current speaker as well. We take the next question from the line of Anil Sarin from Sentrum Wealth.

Yes. Once again, just wanted to know the number of customers. I mean, I've noticed that over the last one year, there has been a good increase in the total number of customers, if you can enlighten me about how they stand now, country wise?

Sure. So unique customers, the group is at 501,000 as of last 2 years. Between U.S. and U.K., U.S. was 321,000, and UK was 179,000.

Okay. And if you can also mention what was the last year's figure?

Yes, sure. So last year was $362,000 for the Group. U.S. was 225,000, and U.K. was 136,000.

Okay. And sorry, if I can just squeeze in 1 little one. How much of OpEx or whatever? How much of investment has already gone into Germany in the fourth quarter? Because I just noticed that there is an increase in the OpEx. Was towards Germany also a factor in that.

I'll take that one, Sunil.

A very small amount. Yes.

Yes. So not substantial. It's about INR 65 lakhs only for Q4, OpEx, which has gone for Germany.

Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference back to the management for closing comments.

I would like to thank all the investors for your continued support, and it was a great question. So thank you. And if you have any questions further, you can ask Dipti Rajput, our CBR India, and we'd happy to answer. I hope you stay safe and well during these difficult times. I'm looking forward to consulting with you in the coming quarters. Thank you.

Thank you. On behalf of Vaibhav Global Limited, that concludes this conference. Thank you all for joining. You may now disconnect your lines.