Verkkokauppa.com Oyj (VERK) Earnings Call Transcript & Summary

Good afternoon. So this is how the pattern look like. And we empower our customers to follow their passion. Welcome to Verkkokauppa.com Capital Markets Day. My name is Marja Makinen, and I'm heading Investor Relations at Verkkokauppa.com, and I'll be your moderator here today. This is actually a very first Capital Markets Day for our company. And due to this pandemic situation, the event is arranged fully virtually and broadcasted over to you from the studio here in Helsinki. Let's look at today's agenda. We have 5 exciting presentations from our CEO, Panu Porkka; from our Commercial Director, Vesa Järveläinen; CTO, Jyrki Tulokas; and CFO, Mikko Forsell. During the presentations, you will hear more about our strategy, how we are executing it and developing our business in order to grow profitably and sustainably. We'll reach our 5-year targets and create value to our stakeholders. We will also share our views, how we see e-commerce and online shopping to develop in the future and how we expect Verkkokauppa to grow its strategy. You are able to participate by commenting and sending your questions throughout the whole event. [Operator Instructions] We have also scheduled a couple of breaks in between presentations. And we will take a couple of your questions after each presentation, and then at the very end of the event, we have this joint Q&A session, where all the presenters are answering questions. The event will end around at 03:00 with Panu's concluding remarks, depending on the amount of your questions. And just to remind you, we will be making forward-looking statements during the presentations, and we have a disclaimer in the material for that. But now let's kick the day off. I'm sure most of you have already met with our CEO, Panu Porkka. Panu joined Verkkokauppa.com as a Board member in 2017. And after getting familiar with the company, he took the responsibilities of CEO in 2018. Now Panu will walk you through our growth strategy, which was renewed and announced earlier this year. I would like to welcome our CEO, Panu Porkka at the stage, and start the day. Panu, please.

Thank you, Marja, for the introduction and a warm welcome also on my behalf for this historic first-ever Capital Markets Day for the great company of Verkkokauppa.com. Today, we are quite excited to bring you news about the strategy and the strategy execution. In the presentations, you will hear more about some growth areas. We'll be deep diving into certain of those. We'll be looking at the assortment closer. We've been looking at B2B, M&A, for example, inorganic growth opportunities and also shed you a new light on the technology backbone, which makes us special, which makes us strong, and we can utilize that in our approach of reaching our targets and also develop the business further according to strategy and develop the customer experience. In my -- today's first presentation, we will start with the short history lane about the company, the birth of the company, where we are today on the market, what are the key competitive advantages that we have taken into consideration on -- when taking measures and taking actions towards the Strategy 2025. We wouldn't be standing here as a proud pioneer of e-commerce in the Finnish landscape without having a great -- can we have the next slide, please, without having a great community, passionate people about 800 serving customers throughout the nation in 4 different mega stores, 2 different logistical footprints in supporting functions all over the organization, making sure that customer promises are met and the mission and vision are carried out. My team, to support the community and to support the staff on the daily day work. You can see here. Besides me today presenting, like Marja already mentioned, CFO, Mikko; Commercial Director, Vesa; and newest member on Board -- on the management team, Jyrki, CTO. So let's get back to the year of '92And actually, the company was founded in a garage, just outside Helsinki in a suburb called Espoo. So quite classical way of starting a business, starting a start-up. From the first day onwards, running the business on a bulleting board system, providing postal deliveries from day 1 really makes us online born. We then develop the company and the business further in largening the assortment, opening up new stores and really getting a household brand in e-commerce and also in consumer electronic market. And then gradually moving from just consumer electronic market into a generalistical role, offering more and more products outside the consumer electronic market and really getting the wide attention and top of mind in the Finnish landscape and also perfectioning our customer experience. Listing on the NASDAQ first list back in the year of 2014, moving to the NASDAQ Helsinki list last year. And now we are ready, the new challenges to take on the targets that we have set ourselves. We are extremely strong in the Finnish landscape when it comes down to retail and especially e-commerce. We are not only a company that has been growing for years and years. We have a strong track record of growth. We have the most visited website. But besides that, we have several aboard about sustainability, about recommendation, about innovation. People really acknowledge us of being the leader, being the pioneer in this business that we are operating. And because of that, we have actually extreme loyal customers. We -- every -- basically every Finn has, at some point, visited the site, but we have actual customers who are truly, truly loyal to the company, over 120,000 active users on a monthly basis. And that group of people is actually growing on a month-to-month basis. So basically, we are converting people who are just getting know with our offering with our services and really converting them into active customers and loyal customers. The second nicest thing about this is that those customers are actually very satisfied with the approach of us in, for example, in the stores. So measuring the Net Promoter Scores in stores gives us a number of 78. So customers are extremely happy and satisfied with our experience. To make sure that we are also always on call, we are always available for the customers, contact center has been developed into more of a 24/7 automated service center. So nowadays, 65% of all contacts actually are handled by automation. So we are always there for the customers. And the fourth thing, which we are probably the most proud of is that -- and that actually underlines the way we approach the business and how happy the customers are. Last year, revenue had only 1% of returns out of all products sold. And that's probably one of the lowest in the market, at least in the Finnish and probably in the European landscape maybe worldwide. So people are really, really happy with the purchases they have made. They are getting the products for the need, high quality and those products are also used. The second thing is actually quite interesting, although we are extremely strong in the local market, e-commerce is always global. You can't just look at the Finnish market with the Finnish players. And if you take a look at the right side of the slide, you can see that if people or customers are asked what site they utilize the most, we top the list even against all those global big players, and that's also -- has always been a nice hurdle for us that the benchmark is somewhere out there. It's not the Finnish market, nor the Nordic market or even the European market, we need to be best-in-class also globally. Sustainability has actually been always in the DNA for many reasons. We have always been kind of on the side of the customer, the Robin Hood of retail, somewhat the rebel doing things differently. And it has always been more important to solve the problem than sell a product. It has always been okay for the customer, not to buy. It's rather long-term perspective that you really gain the trust and you have seen us transparent, good guy and really on customer side, and that is reflected in our DNA that's reflected in our values, and that's also reflected in the return rate, which are extremely low. Then there are obviously some hygiene things, social and governance and environmental things that nowadays are more must-dos than something that you can set yourself apart competitors. Slightly low battery, but it doesn't -- maybe we can take the next slide. So -- and the next. The market in Finland and also in the Nordics in Europe is quite interesting. Because the online shift and the changes in consumer behavior show that today, they are actually normal patterns, new normal. People are utilizing mobile devices more and more to get products, search products, also purchase products. And it is estimated that by year 2025, the online penetration will be significantly higher than it is today. And we have closely looked at the market from our categories. And we have calculated quite closely on what will be the online shift, so business from offline going to online. In our core categories, for example, the market opportunity within the next coming 5 years is EUR 900 million. So basically, retail going online, offline losing to online. And the same calculation done for our evolving categories on top of that EUR 500 million market opportunity. And then even looking into untapped opportunities, categories where we are not yet present, that will open up a new opportunity of EUR 800 million. And for the first time, later today, Vesa will also open up on those untapped opportunities and give you insight on where we might be going the next coming years. Next slide, please. Next. So when we started to work around the strategy, it was extremely important to understand why we are in our business and what makes us strong. And what is the value to the customers? What's the value proposition to our customers? And it was quite easy to identify 4 major entities on what -- around what the company should address development work and should make sure that the experience or assortment, for example, are getting better and better, how we can provide the most exciting assortment in our categories or the best possible frictionless omnichannel experience. Because of the technology backbone that we have, that we can release new features every day which will be then looked closer with Jyrki's presentation. And speed of flexibility is probably more focused in the e-commerce. And I think it's getting more and more important that the expectations of customers regarding delivery experience is getting higher and higher. So delivery times of week or 2 weeks or not knowing when products are coming or being shipped or delivered home is unacceptable today. So that's an area where we want to exceed and there's also some investments around that, that I will touch upon in the part 2 of the presentation. And then it all is about trust. A lot of decisions are not only made on data, on price or availability. Those things sometimes are also hygiene factors. The top of mind sharing the same values and being transparent and sustainable makes a difference in today's retail landscape. Yes, I got it. And from those value proposition, from those 4 major entities, we discovered that we have actually 5 competitive advantages. Areas of the business where we exceed but we are better when it comes down to the customer experience or a strong brand. Our brand position is the best in Finland when compared to our direct competitors. Efficient fulfillment. We are the fastest in Finland. When it comes down to same-day deliveries, next-day deliveries, we are the fastest because of the local warehouses and extreme high inventories that we can utilize for our growth. Superior technology backbone makes us able to be really agile, release new features. And make sure that the front-end and back-end are always on top of the game. And assortment, we have talked many, many times before, we have extremely large, extensive and qualitative assortment and Vesa will open up how we can take that even further. And because of the leanness of the business, only 4 stores, concentrating on data and e-commerce. We can run the operations with lower margins, meaning that lower costs per ratio on revenue makes us agile, more cost efficient, and we can actually invest into the business, and we can maintain these margin levels because the market obviously will not easen up. And if we take the value propositions and 5 competitive advantages. We identified that there are actually 8 cornerstones behind our strategy. And from this day onwards, we will only develop the company businesses around these cornerstones. So basically, we have been adopting a new agile enterprise development framework that all development work in the company is according to strategy, and that will also speed up the strategy execution. So in short, how or what does the strategy look like? It is primarily organic, but we have also some unorganic opportunities. It is online-driven. And we can basically get it into 3 sectors on revenue and profitability development. The first area is around the online shift. How can we utilize this great opportunity with our approach, with our standing in core categories, in evolving categories and also getting to new markets with untapped categories as specialty retail and offline retail is fragmented, partly struggling and a strong e-commerce player has a huge opportunity to get their market share. In the middle, it is more about utilizing the platform, utilizing the business model that we have. B2B business is already big. It is growing. We have a standing there, but we have huge opportunities to double our market share and double the business. Private label, for example, we have just touched upon the surface. We have a [ most busy website ], great platform where we can really launch new owned products and therefore, be also fast to market when it comes down to new trends. Services portfolio is something that we will address not only close to product, but also stand-alone services. And the last bit, last part, I will look closer in my second part is inorganic growth and M&A. And the latter -- and on the right side of the slide, you can see that running the business like planned actually the sales mix, the portfolio mix from categories will have a positive effect on the margin as such, and then making sure that we keep on investing in technology, in our operations, make sure that we can scale the business. And with this, we end up in our long-term targets, business goal to reach EUR 1 billion in revenue by year 2025, at the same time, reaching EBITDA of EUR 50 million and fixed cost be somewhere around 10% or slightly below of that. But the interesting part about these long-term targets is that we are not only a growth company, historically and for the coming years. We are also a dividend company. We have actually been paying out a quarterly growing dividend since 2017. We were one of the first companies to introduce that, and we have said that we want to keep on holding to this promise. We can because of the lean business model. We don't need to invest as much as our competitors, and we are debt-free. So that makes us a growth company and dividend company combined. So if we summarize the first part of the overview of the strategy, we have a good business model. We are born online. We are the clear market leader in a business, in a market that's growing. The market development, new behavior consumer patterns are the new norm. So the market changes going to the future are in favor of our strategy. And we have a strong standing here in the Finnish market. We are the most-trusted brand, most-visited site, most-innovative company and so forth and so forth. So that's a good platform when introducing new categories and really taking the business further. And we really believe that we have a winning strategy. And we know where to go and how to play. Thank you all.

Thank you, Panu, for this very interesting presentation. Can I ask you one personal question?

Yes, sure.

We say that our website is home for all persons, so what was your latest shopping on our webshop.

Well, actually, I have 2 small children, the youngest son is 9 months. So to be honest, I think the latest have been around my children. So well, that's a passion as such as well. So rather something for the family than a new tennis racket for myself.

Well, excellent. Well, that's a passion indeed. Now we have a short break. We will continue at 01:00 at sharp, go get a cup of coffee or do some trading and see you soon. Thank you. [Break]

Welcome back. I hope you had a nice break. Just before our break, we had some misses with the voice, and I was asking from Panu that once our online shop is home for all persons, that what was his latest shopping on our webshop and the answer was what you heard. Before the break Panu went through our operating environment and how we are positioned in a Finnish e-commerce market. We have our ambitious growth strategy. And now Panu will continue and present in detail our road to EUR 1 billion. Please, Panu.

Thank you, Marja. [Technical Difficulty] Can you hear me now? So I need to use the mic. Okay. So I don't know what you heard or not. But now we will go more deep into some chosen areas of our growth strategy. I will open up more about the B2B business, how we gain their market share. An interesting area also M&A and new business opportunities, something that we haven't conducted before. But we are open, we are active on that market and let's see what the time brings with it. And the last part, as it is so important, the delivery experience being the fastest, most flexible, most trusted in e-commerce. That's an area we want to address again and make some highlights how we are evolving on that. The growth is basically divided in 3 sectors. So obviously, the biggest part of the growth will happen will come out of the assortment, exciting assortment that we have in core categories, evolving categories, also new categories and untapped opportunity. The second part of the growth will come from the already mentioned B2B business, which I will, just in a few minutes, go slightly more in detail through. And the last part is the new business, new growth, M&A, private label, for example. So that will be around EUR 100 million going forward to the EUR 1 billion revenue target. So the category part will be presented later in Vesa's part, and I will tap into these 2 other ones. Actually doubling the B2B business is something that we have already done once. So if you look at the left side of the slide, you see that from '15 to '20 just over EUR 50 million to just short of EUR 100 million, we actually have been doubling the business nicely, continuously getting more and more traction. We have been developing the business quite extensively throughout the last year. And we believe that we can set these ambitious targets because we have clear competitive advantages. We have been taking this like consumer business, high self-service, convenience, easiness of shopping is actually something that B2B customers value as much, not spending too much money, not spending too much time on getting those needed products for their working environment is something that we are very good at, at the moment. We have actually acquired broad customer base already. So over 40,000 annually active customers in our portfolio already, but still the penetration is quite low. So we see that gaining new market share and reaching also to new groups of B2B business, we can significantly grow our market share. And the last one is about the market. There's a lot of talk about the B2C market, consumer behavior changes. But actually, the same changes can be seen in the B2B market as well. That market is moving actually slightly faster online than the B2C market. So with our approach, with our market position with our born online attitude, we can gain market share in the market and business that is shifting offline to online. If you closely look at the market, it was probably about EUR 1.7 billion, the total size of the business last year. The biggest part of the B2B market in Finland comes from the small and midsized businesses. Enterprise then amounting to EUR 550 million and public areas then EUR 350 million. And in the middle part, you can see that our market share is quite moderate at the moment. Even in SMB, we have only 9% of the market; in enterprise, only 2%; and public, only 1%. So there's a significant opportunity for us gaining market share and reaching our goal, which would mean that 17%, 7% and 3% market share in those segments will be then by end of 2025. The second area, obviously, we are focusing on organic growth. The biggest part of the growth will come from current businesses and current groups. But we want to make sure that we have that extra turbo boost to make sure that we reach our target and utilizing our strong cash position, there is good room, good opportunity for us to gain additional growth through M&A, for example. We looked at the market out of 3 different perspectives. First of all, the geographical one. It is actually quite important for us that the businesses, it's Finland-based or at least foothold in Finland. The easy reasoning behind that is it's just easier to integrate companies that you're familiar with in certain levels. The market, you understand rather than going somewhere where you don't know the people, the culture and the market. The second thing is that we want to see some technology competence. We want to see the same passion for consumer electronics or at least for customer experience. So DNA needs to be somewhat close to ours. And if we then talk about the sizes of those possible opportunities, we are rather not interested in very small or very big ones. So small, midsized businesses are something that we are seeking or looking at with clear synergies. Obviously, if the business would be too small, so spend time, it doesn't add up to the growth. And if it would be too big, there would be a risk that too much attention would be drawn into that and not into the daily day operations. Well, what are the potential outcomes out of these M&A activities, for example. So first of all, we could serve new customers if purchasing niche online player who has a good grip of their own segment own customer portfolio. We can offer them our assortment and gain new customers. Well, vice versa, it was also bring that those new categories would be offered to our customers, to our customer base, so that would be doubling the potential. And we are also open up for new ways of conducting businesses or strengthening our core competencies or getting even new competencies and know-how into the company to boost the operations. So those are possible outcomes that would come out of that. Like I said before, the speed and flexibility being the fastest, most trusted, most-flexible operator and e-commerce landscape is really important to us. It sets apart from the market, the other players in Finland, and that's actually one of the strongest key competitive advantages if looking at global players, for example, who don't have a physical presence in the Finnish market. And with this slide, you can actually see that the company has been developing the operations quite strongly in the last years. So it was just year 2017, where basically, we were delivering within a few days to the Finnish consumers. We were the fastest already back then, but still, it took like 1, 2, 3 days to get those things delivered that we had in our local warehouses. Today, we can address almost 70% of the population within next day. We have same-day deliveries, for example. And if we would take it to another level, really a game changer, utilizing the stores as logistical hubs, local mini fulfillment centers and delivering the assortment from the stores to the neighborhoods, we could be in a position to tap almost 90% of Finnish population within the next day, and almost 50% of next -- within the same day. And that would be basically game over for global players in the perspective of being fast. So we have the opportunities to be the fastest and take it even to the next level. And to make sure that with the increase in volume, with the increase in assortment, we need to invest in this line of business heavily. We disclosed in spring time this year that we'll be building a warehouse automation system within our logistics center in Jätkäsaari, making it really urban micro fulfillment center, 36 robots doing the picking, and we can actually widen the assortment that's been served from this logistic hub by approximately 10,000 to 15,000 SKU. So that's also supporting our strategic initiatives to offer even wider assortment to our end consumers. And these already mentioned targets, long-term targets, will be established throughout the initiatives that we have planned in those growth areas. If I summarize quickly, well, first of all, the assortment and the growth out of the assortment will be tapped on later in Vesa's presentation. The strong position in B2B is actually a super relevant and realistic way of getting new B2B customers and reaching our goals. We have a different approach to the business. We are the market leader when it comes down to e-commerce in B2B and the same approach that we have in the consumer business, utilizing in that line of business makes us strong and makes us grow. M&A, interesting tool to have in the toolbox, whether it's new clients, new customer group segments, whether it's new categories, new niches or also some new ideas new competencies and know-how to the company. So we are looking actively into that and also hope that we can somewhat tap into that box as well in the coming years. And the last one is important because the core business is the major part of our growth also by year 2025. How to find new ways of investing in technologies, the boost growth and make sure that we maintain the leaders in e-commerce. Thank you. And I think now we go to the Q&A.

Thank you, Panu, for the presentations, very interesting. I have got a couple of questions here from the audience. And just to remind you that you are, as said, able to participate throughout the whole event, and you can send your questions or comments via question form, which you can find below the webcast window on the event page. So I have here a question regarding our B2B business growth target. As we have said that we target to grow in B2B with EUR 100 million. So to double the business by the end of strategy period, by the end of 2025, what are our main actions to achieve the growth? Are you planning to make some acquisition on this field?

Yes. Well, I actually believe that maintaining the operations, investing in the operations, gaining new customers, attracting new customers. So strengthening the organization, maybe doing something on the marketing side as well. We have been quite inactive on that area. And introducing our solution, which is the best in the market. I personally believe that there is no need of M&A in this segment to get to the targets that we have set ourselves.

Thank you. Very good. And next question is regarding about growth in general during the whole strategy period. So can we expect somewhat equal growth for each strategy year towards '25?

No. There are areas where the growth is closer to being linear. For example, the just mentioned B2B will be quite steadily growing towards year 2025. If you look at category and category expansion, it takes some time. So from zero to hero, it will take a few years. So if looking at untapped opportunities, obviously, those ones will hit the top line, at the last few years of the strategy period, more steadily and more linear, the growth will be in core categories. Evolving, I think there will be a hockey stick as well on the growth. And if looking then, for example, private label or M&A, those ones they just come at some point, the lead time for private label production and product development at least 6 months to 9 months. So parts of the business growing steadily and linear like core categories and B2B part of the businesses or the growth areas need still some investments and those will kick in later.

Thank you, Panu. And thank you for your questions so far. We will continue with further questions to Panu then at the end of the event in Q&A session. Next, Vesa Järveläinen will take the stage. Vesa is our Commercial Director, and he's been in charge of our purchasing operations since 2017. Vesa will tell you more about our exciting assortment and how we will win the market and grow with it. Welcome, Vesa.

Hello. My name is Vesa. I'm very excited to be here today to talk to you about our exciting assortment. I hope the technical issues are solved, luckily, we are used to these things during this remote time. I really hope that next time we meet, it's in a live environment. Anyway, 15 years ago, when I started in this company, we were basically selling IT products and only to consumers. Today, we have 80,000 different products. We have a very wide range of different products and we also have a strong B2B. Today, I will talk to you about our assortment, and let's first have a look at our assortment strategy. So we have a really strong brand. We don't believe that the brand limits our options. We are able to sell pretty much anything we decide to engage into. In the recent years, we have expanded our assortment with a lot of new types of products really successfully and even gained a strong foothold in several different products. Our low fixed costs enable us an aggressive pricing strategy if needed. However, generally speaking, when we talk about new products, we are aiming for better margins and higher profitability. Currently, we only exclude fashion products, which have high return rates and also fresh food, which has quite logistic challenges. We are doing ongoing development in order to gain access to new products. This means value-adding services and also mostly technical enablers regarding our product information, supply chain and also the user experience on our website. So in the recent months, we have expanded our assortment at a record pace, we are currently releasing over 50 products on our website on a daily basis. To name a few examples, we have electric car chargers where we are already a top player in the Finnish market. We have all the brands and a very wide assortment already, and that's something we will focus on later on as well. We have been really successful in electric tables. That's been very popular during this remote work time. We also have endless amounts of new brands. We have added 2 assortments, example, Tom Dixon designer lamps and lighting products. So in this presentation, I have split our products into 3 different categories. We have the core categories. It's the consumer electronics, the home appliances, those products, we are most known of. Then we have the evolving categories, this is the segment where we are growing really strong and also expect to grow strong in the future. These are toys, strollers, barbecue, et cetera. And then we have these untapped categories, categories where we are not yet involved in, but we are constantly looking into new opportunities. I will next have a small deep dive into these 3 types of categories. Let's start with the core categories, the ones we are known of. The market is about EUR 3 billion. Our current market share is around 16 percentages. The market is not expected to grow in the coming years. However, there's an accelerated shift to online in these products. The online share of this market is already quite high. It's almost 30%, but we are estimating it will grow to up to 50% in the coming years. Even with the high market share, we have still a lot of room to improve in these products as well. Then the one I'm mostly excited about, the evolving categories. These are products that are typically bought from the brick-and-mortar stores, but are moving online at a really fast pace. And these are also products which have really attractive margins. This is a EUR 2 billion market size, same story. The market is not expected to grow. However, the online share of sales will grow in the coming years significantly. This is a very fragmented market. There is not really like clear market leaders. So we believe it will consolidate, and we believe we will be the leading e-commerce player taking the big chunk of this business. Then we have the untapped categories. This is, for instance, home renovation, furniture, cosmetics, et cetera. It's a huge market, EUR 6 billion, same story, market will not grow, but online will grow in these products as well. These are products where we are not yet involved in. However, we are doing market testing here and there with specific products and looking at different opportunities and figuring out what is the correct way to enter these products. This is a market we will be involved in sooner or later. So as a recap, 3 major categories, one, where we have a high market share and two, where we have barely scratched the surface. I wish that if you remember one thing from my presentation is this slide and the addressable market of EUR 11 billion. With last year's EUR 550 million turnover, we have a lot of room to improve and grow. To support our assortment, we -- and to strengthen it, we will need our private label products. These are own product development that will support the very strong A brand assortment we have. We have several thousand products already, and we have established very well-known brands in Finland. I believe many of these brands you can see in the middle of the page are so known that the consumer doesn't even realize its Verkkokauppa.com brand. We will continue to develop our private label. We have really ambitious growth goals here. And there's so much things we can do in this sector and will do. And what is the best thing is that we are making sure that it's sustainable growth, especially when we are the ones importing these to the market. So moving towards the EUR 1 billion, how it will happen? It will be healthy growth when we grow the evolving categories, and when we introduce new products, those have, generally speaking, higher margins. So we will improve our margins overall. And also it's a tool to be aggressive on those core categories, which are really price competitive in the Finnish market. The private label products as well will increase our total profitability. We will continue to expand the assortment at a record pace, and as we develop our technical tools, we will be able to add even more products at a faster pace. We have a really agile and brave approach to the daily work we do at the purchasing department. We are able to react on a few hours notice to new products and list them to the customer on our website. We are really data-driven. We look carefully and monitor carefully at the consumer buying behavior and key words, the market data, everything trying to meet the demand of the customers and selling the products what the customer wants to buy. We have top in-house professionals in the purchasing department, making sure we have the best prices, best terms, best products and also utilizing our very wide supply chain. And that has been very useful, especially in this time of uncertainty in the deliveries globally. So our strong assortment today and tomorrow will consist of strong A brands and really intriguing own products, private label brands. And also in the future, there are so huge expansion possibilities that I'm really looking forward to show to you as soon as possible. These are the opportunities we are evaluating daily, looking into and figuring out how to approach and how to penetrate those areas. A few key takeaways from my presentation, the history data and the future forecast supports our success story to continue. The online share of sales will grow, especially in those evolving categories which we are already involved in and also in the new products, which are usually bought from the brick-and-mortar physical stores. These will be bought online at a faster and faster pace. And those are the ones we will be strongly involved in the coming months and years. And we will continue to expand our assortment at a record pace, and we will develop what is needed to enable us to infiltrate those product areas that are currently out of our reach. I notice that I'm a little bit fast on the time I have spent 11 minutes, but thank you. I hope this is enough.

Thank you, Vesa. Very interesting presentation regarding our exciting assortment. We have got a couple of questions here for you. Firstly, regarding the shortage of components now in connection to this pandemic and corona period. So as there are some shortages of some components, for example, for televisions, is there a risk of some products to sold out during the high season? Or on the other hand, risk for price increases for end customers.

Very good question. There is a risk of shortage for the products. However, we have been working for months to prepare for the coming holiday season. And also, basically, this whole pandemic time has been a lot of uncertainty in product availability. And we have coped with the situation and it's normal for us in today's day. And what was the rest of the question, sorry?

Whether there is a risk for price increases for...

Price increase risk, we are trying to fight to keep the prices down. However, there are issues with the containers, which have increased a lot in pricing. So let's see how it goes. I believe the Finnish market is quite price competitive. There are 3 major players in the consumer electronics market. Everybody is fighting for the market shares. So it's theoretically possible that even if our cost increases, the market prices will stay the same, but we are doing everything in our power to make sure that the consumer prices will stay on a low level.

Thank you. Very good. In your presentation, you talk a lot about untapped opportunities. Is there some categories that you could you mention as an example that could be those untapped opportunities for us.

Well, if you think about cosmetics, for instance, that's a EUR 1 billion revenue in Finland per year, annual EUR 1 billion revenue. And those products fit quite easily to online business. It's a great average price product, and it's physically the correct size. That's something that's really intriguing. And we have also identified that we need some features on our website in order to serve the customer in a best possible way. So we are working on our product information and the user experience on the website. And hopefully, sooner or later, we will be involved, for instance, in those areas. Then there is also bigger products that don't fit in our logistics. So products that we would rather drop ship to the customers. That's also something that requires a little bit of technical development. We are working on that as well. And I'm looking forward to selling products that we currently are not doing because of logistical limitations.

Thank you. Very good. Then maybe the last one here now regarding especially the private label products. You will do an increasing amount of sourcing from far east. How do you take care of supply chain sustainability regarding work environment, human rights, environmental and safety issues, for example?

Good question as well. Sustainability, of course, really important for us. We have a sustainability steering group working to improve these things. And I also believe we are in really good shape. We are part of the BSCI community that makes sure that the factories we are buying from are audited and taking care of everything as it's meant to be. And this is an area where we are doing a lot of work, and we continue to develop and making sure, especially our own products that everything is in a sustainable and correct way.

Very good. Now we will take a break, and we will stick into our agenda and schedule that we announced earlier, and we will be back here at 02:00. See you soon. [Break]

Welcome back. Just to remind you again, so there is a possibility for all you in the audience to participate by sending your questions via question form, which you can find below the webcast window on the event page. At the end of August, we announced that we will strengthen our management team to support strategy implementation and business development. One of these strengthenings was Jyrki Tulokas, who was appointed as our Chief Technology Officer. Jyrki has now around 1 month experience in Verkkokauppa.com, and he will now present his fresh views on our technology and how -- and what possibilities it will offer for the company in the future. Welcome onstage. Jyrki, please.

Good afternoon, and welcome on my behalf as well. So as Marja said, a recent joiner to the company, and I'll start with a personal note on Verkkokauppa.com. So like many other IT professionals in Finland, I've been a longtime fan of the company as well as a customer for more than a decade -- or more than the decade, I guess. And I think that the attitude that Panu was describing, the rebel-like attitude, being innovative, being on the customer's side was also something that drew me and attracted me to join the company as well. And after a month in the company, I have to say it's a fantastic and driven company with passionate people. So everything that was said in the intro really is true. So again, as Panu said, we've been a passionate pioneer of e-commerce for more than 20 years. But that also meant that we've been developing the technologies for our business for the whole time because those technologies didn't really exist when we've started the business. So we've had to create our own success. We've always wanted to be as well doing things in a different way, in a better way, and it means that the company has a really strong culture in innovation and doing technical things as well really well. And as said, technology continues to be the -- one of the things that we want to do very well also going forward, so it's a key strategic cornerstone for the company going forward as well. So a good track record of innovation in the past, and a bright future ahead of us as well. That is very clear. So we have a very strong team. We do -- unlike other companies in our industry, we develop a lot of the technologies in-house, and we have a very strong team across our business. Our strong design and customer experience teams, they make sure that our experience for the customers is the best as possible wherever they meet us as well as making sure that we get optimal business results. Together with our product owners and business sponsors, they drive our software development teams to great results and doing the things exactly as we want them as a company. We also -- as a modern agile company, we run our own infrastructure. We develop it, we operate it. Similarly, we have a great team of cybersecurity experts, making sure that our own developed technology as well as our operations meet the high standards that we set for security. And through this technology and having those competencies in-house, one of the great things that is showing how good things are on our side is that we have been one of the top innovators in the company according to recent studies. So among the top most innovative companies in Finland. And of course, we are going to stay on that track record as well going forward. So it is a technology company with a unique platform and technology. So what do we mean by that technology? So I split it into 3 different areas to begin with. So firstly, there is our core ERP technology, and that is really the backbone of everything. So all of the data of the inventories, our customer data, product data, all sits there. It is the one single place where we interpret, store data and make sense of our business. That is a really unique thing for us because for our employees and our customers, it means that whenever they meet us, we have the same view of the customer and what they have, for example, bought from us. And this is unique as in many other retailers, the data, whether it's customer data or the warehouse data, can be scattered to multiple different systems. So for us, this is truly a great way to give the customer the right experience wherever they are meeting us. It also means that we can really tune our systems to how we want them to work and work in the process as we want them to work and not to rely on third-party ERP systems and always wanting them to change according to how we want that to work. So it's a really, truly big benefit for us and gives us this agility that we want -- we need in such a fast-moving business. The second area of technology that we have is, of course, our storefronts. So we develop our e-commerce front end as well. And again, this enables us to do exactly as we want to provide the experience to our customers. So the right customer experience is in our hands. It also means that, for example, for our sales and marketing, we adapt to their needs very quickly. Our modern cloud-based architecture also allows us to scale into peak times. For example, Black Friday and other season peaks can be very tough to handle in this business. But as we have this in our own hands, we'd make great strides to make sure that we can run businesses in very high scale as well and peak times. Then the third area of where we really shine and where we need technical capabilities is integrations. So our business really runs on integrations on all ends, whether it's the warehouse or the suppliers, to finance, to deliveries. And this is, of course, the right -- a key area to get right as well. It also means that we can run a lot of the analytics through these integrations, what's happening where, within our business. And again, having that technical capability in-house means that we can be fast to production. And as Panu said, the key thing around this is we are today a very agile enterprise company. So everything is around our 8 key strategic cornerstones. Whether it's sales, marketing or our R&D, everything works according to those 8 pipelines, as we call them. And as an agile company, one proof of that is that every day, we can improve -- we provide 30 new enhancements to our systems online without any maintenance windows. So we are really an agile company, pushing things online every day in a fast pace. Retail is a fantastic area to deploy data analytics. Wherever you look at it, whether it's pricing, marketing, websites, sales customers, logistics, warehouse, it all screams for data and great analytics and automation. And we have been in the forefront of developing data analytics. For example, in our warehouse prediction and how much -- what do we need and at what time already before. So we've been doing data analytics for a long time and creating automation around that for demand prediction, for example, to optimize our warehouse and inside logistics or -- as well as outside logistics. But I still think that there is enormous amount of things that we can improve on this area, just alone, for example, in this previous case of warehouse and logistics automation. But there are great, as said, other areas of improving, like pricing or understanding our customers better, understanding how they use our e-commerce platform and so on. But I do believe that in the future, for example, in purchasing, a lot of the decisions, if not all, about what we buy, when we buy and in what quantity we buy, will be done automatically without or very little human intervention. So there is a lot to be gained in data analytics and automation and AI in our business. So very excited to work on this area and something that we are now investing into with our own data warehouse and data strategy. So an exciting area for us going forward. Another area where we deploy a lot of analytics and automation and algorithms is the experience side of our e-commerce. So as everybody can understand, this area is a great area to use analytics as -- really the optimizing the user experience means here that we have higher customer satisfaction. We can increase revenue, of course, and the basket size, so how much the customers are buying from us. We also, of course, track very closely our conversion rate. So how many -- how people -- how many of those that actually come to our site end up purchasing something. A good example of where we use modern data analytics and modern technologies is search that we've been lately improving. So this can be an area to -- difficult to get right and depends on, for example, how good your product information is in your own systems or how good algorithms you're currently deploying. In this search case, for example, we need to make sure that the customer finds the thing that they're looking for, fast and accurately. And an area that we will be developing also further as well because personalization and then providing the customer what -- exactly what they're looking for is a key of differentiation going forward, but something that customers will expect as well. The other example of use of analytics and AI in this area is recommendations. So here, an example of customer buying a Lenovo laptop, we need to make sure that the bag that we are recommending here is exactly the right type of bag for that product. And of course, here, a good recommendation engine means that we have the right choice for the customer. This is important from a business perspective as well that we have very low return rates, and we want to keep, of course, those low return rates. So giving the customer the right product that they were looking for is important from that point of view as well. As said, customer experience is one of our key cornerstones, and customers expect really fast and seamless omnichannel experiences, flexible deliveries, experiences, optimized mobile commerce experience and simplified payment solutions. And some of the enhancements that we are continuously doing here, of course, with our own in-house team, as we control the experience, some of those examples mentioned here. For example, the AI to improve our customer care, meaning that the customer will get faster response and better accuracy to their problem. So today, when we've implemented our automated chat response to customers, now more than 60% of our cases are handled through automation, of course, giving us a very good leverage and efficiency and cost structure from that point of view. Another example of where we lately improved our e-commerce is our online outlet, which used to be just in the physical stores, is now available also on e-commerce and has had very great success. So these are some of the things that we can quickly do internally with our own teams and optimize the results as well. Today, 60% of our customers are visiting us through a mobile device, and again, something that we need to be optimizing all the time through their experiences, that how -- we understand how they're using our sites. Another cornerstone -- key strategic cornerstone for us and what customers are expecting from us, is speed and flexibility of both ends, whether it's our logistics on the warehouse automation or then the other end on the deliveries. And as mentioned here earlier, we are investing now into a new warehouse automation system. And with our internal capabilities and our own internal systems, we can do this very quickly. So in this case, for example, a majority of the work actually goes into installing the grids and the physical components, and it's actually a very quick job for our internal team to implement this into our own ERP system. Something that would be quite different for another type of retailer that would work on some third-party systems. On the other end of our business. Deliveries, of course, as said, being one of the big things that customers are looking for, and what they want is fast deliveries. They want also to understand when they're getting their goods, and this is an area where we need to be very well integrated to our delivery partners. And developing that all the time is another key area of us and getting those integrations to be really up to speed and online. So in summary, we are a very agile technology company that has an ability to innovate fast and an entrepreneurial culture inside the company. We have very strong competitive advantages in our technology as well as the know-how in retail in the company, which gives us as a big edge in the business. And finally, the third bullet is about the data and the technology, enabling our future growth and efficiency. This -- using the data in the right way, using analytics and automation will give -- with our volumes and our improving and growing assortment, it will give us a big leverage both on top line and bottom line. So thank you.

Thank you, Jyrki. Very interesting presentation, and good to hear about all the improvements regarding customer experience. We have got a couple of questions here from the audience. You have mentioned that your own IT platform and code is the key to your success. Can you please elaborate that in more detail? How is that a competitive advantage for you?

Yes, and as mentioned in my presentation, the key things are related really to the unique -- like being able to adapt it fast, being able to modify it according to our needs, and not waiting for some third party or some other supplier to make those changes for us or not even making those changes for us, as it happens in many cases. So I think that this adaptability and being fast is super important in our business, which simply just moves very fast.

Thank you. Very good. Well, next one, regarding the scaling of the business and IT systems. So what business scaling challenges in IT, for example in dealing with increasing assortment, are you facing? And how do you plan to solve those?

So I think technology, in general, I think we're solving those challenges maybe with the growing assortment across the board with technology. It can be, like I said, with the warehouse automation, making sure that we can actually deliver the goods on that end of the things fast enough and it's efficient. But then on the other end, just giving those examples that people actually find the things on our site that they're looking for, and it's fast and they find it a good experience. And we can offer them also other ingredients and things that they may have not even thought about. So I think those are just a few examples of how we need to adapt this business. But I don't think there are any big blockers as such. It's just evolution of things.

Right. Very good. And then one more. How are you benefiting all the customer data that you have at the moment?

So as said, data is a super driver for our business already and needs to be even more that going forward. And for us, it's firstly about learning about the customer, what they are looking for. As Vesa said, we need to understand what are the things that customers want to buy from us, what new things are coming up and so on. So there's that area where we can use customer data, and understanding of what they would be potentially looking for next as well. So there's many things that -- on customer data that we can utilize.

Thank you, Jyrki, for answers and again, the presentation. Further questions, we will save after next presentation when we have this joint Q&A. But next, we will have a financial update, figures and facts about our performance. And that will be presented, of course, our CFO, Mikko Forsell. Mikko joined Verkkokauppa.com in 2019. And I guess that one of the first projects at that time was our listing in the NASDAQ Helsinki Stock Exchange, which then happened in June 2020. Welcome to the stage, Mikko.

So good afternoon also from my side, being last, but hopefully not least. So today, I will be going through briefly how we have been so far executing our strategy. I will focus also giving the update in the service portfolio that we are developing among -- with our assortment, which Vesa went through. Then we discuss briefly about the scalability, how we will be not only achieving EUR 1 billion as a turnover, but also doing that in a profitable way. Then I will also share some latest things that we have been focusing on, the area of sustainability and some plans around that one. And then some words still also about the -- our owners' ownership structure, and then we will sum up that one. So let's briefly look at first how we have been so far proceeding with our strategic targets of the first half of the year. So a busy slide as such, but to -- highlighting some of the key things as such. So as Panu already mentioned that in terms of the sales development, we have been constantly growing as a company. And what is, I think, interesting in the first picture here is that if you look at what is the online share of our business versus the off-line share, that we have been steadily growing as a company. But at the same time, the growth has been mainly driven by the online growth. So by end of last year, we had -- 56% of our sales was coming from online. And now if you look at the first half of the year, it's already 61%. So I think if we look at our plans as going ahead and to transition from off-line to online, it's visible on -- during the first half of the year. B2B. We have been already discussing about that one somewhat, only highlighting based on the first half of the year that we have been proceeding with our plans accordingly. So first half of the year, we have been growing 24% versus what was the previous year first half as such. What is the focus for us? Of course, is improving the profitability. So there has been, due to tight competition over the years, previous years -- of course, some years that the overall -- the scalability of the business in terms of the profitability improvement has not been visible in the bottom line. But if we look at the last year already and look into achievement during this year, I think we are well equipped towards the EUR 50 million EBIT and 5% of the turnover. What is important to also remember and what is important to our owners, of course, is that we are constantly paying growing dividends to our owners. And that is something that we have also stated in our strategy that we will continue to do so during the strategy period as such. Then we move on. So I will open up a bit what is our approach towards our services and how we will develop those one as going forward. So internally, we split our services to the 3 different type of sectors. We discuss about the financial services, we discuss about the new product-related services and also stand-alone services. On the following slide, I will be more going through the financial services. So in terms of the new product services, as we are expanding the assortment, and as Vesa already mentioned that there are quite a few categories that we look into. In some of these categories, we see that the -- it's not only about the product, but it's also some sort of services related to product, which is something that the customers are seeking for. And we have been consistently reviewing the areas where we believe that there will be, in the longer term, value created for our customers in terms of not only selling the products but also supporting the sales with the services. And I think every one of us who is having the big TV and you would like to have it hanging on the wall, it's clear that it's not something that every one of us is capable or willing to do. So type of installing services and so forth are getting more and more common. And as Vesa mentioned that in terms of these recharges of the cars and so forth, you need to have the license to actually install that things. And as customers are more seeking for the solution for their problem, so we are closely looking what are the services that we will be offering to our customers so that they will get the full solution for themselves. Stand-alone services is an interesting topic, of course, for us as well. So having, all in all, more than 80 million visits on our website on a yearly basis, it gives us a ground for defining and discovering the services that could be served via our platform. And those will be something that we look into as going forward. Then if I look at the financial services a bit more in a detailed way. I would like to take this next slide as such. So it gives you the bit of a path that what we have been doing in this area. So the company took the decision in late 2015 that they will introduce this financing option for our consumer customers, not only to purchase the product, but also finance that by the company. And we introduced this brand called Apuraha, which is basically part payment financial service that we are offering to our customers. After the years, we have been steadily growing that part of our business. So starting from some millions of euros that was financed by us. So if we look at the last year numbers, end of 2020, already more than EUR 24 million of our product sales included also the financing services that we offered to our customers. And from my side, what was interesting development that we have been doing this since 2020 has been that we have been actually introducing the in-house solution for the credit scoring and all the processes related to that one. And at the time when we were developing this functionality and this system, we also recognized that with this setup and with the processes, we will be also able to give opportunity for those applicants or those customers who are not getting the green or the positive credit decisions to someone else to potentially finance that purchase that they would like to do. So we introduced late last year the functionality, which is from the customer perspective, looks more or less seamless. So if we give the negative credit decisions, then it will be automatically offered some external financiers the possibility to do the financing. And since that time, it has been going the good way, so we have been increasing the approval rate when it comes to financing. And we believe that, that will be something that as going forward, will be some service that we continue to enhance and build up as going forward. Then something new, what we are currently doing, which is not actually yet available for our customers, but will be in some weeks' time. So we are also introducing a new products in the area of finance. So we have build up the product, which is what we call the credit limit account. So meaning that the customers of ours can apply the credit limit from EUR 1,000 to EUR 3,000 and for them then to utilize for their purchases. And that's something that will be launched now prior the peak season in November time. Then if we move on to the growth that scales, important topic. I think many ways, we have been already in the previous presentation, touch upon the key things around this one. But summing that up a bit. So to put it very simple, we seek for improving our margins -- gross margins. And at the same time, we want to secure that we have the efficiency and scalability in place. When it comes to improving the margins, it's clearly that our assortment and the product portfolio, we are searching growth in evolving categories and in untapped categories, which, in general terms, have a higher margin. So that will clearly contribute to growth in terms of the profitability. As Vesa has mentioned already, so the private label, we seek for a clear step up in terms of the private label sales as well having totally different margin structure than the normal A brands, especially in the consumer electrics. As at the same time, services, I just went through the financial services. But adding up to other services, plus then to the new business -- businesses or business potentials that we seek, we clearly seek for improved margin versus the current business structure in terms of the sales. And this will contribute in coming 5 years' time something between EUR 20 million to EUR 25 million. At the same time, we also will seek for the efficiency and scalability in our own operations. And as we have been already going through some of the investments, so I will just sum up the key things here. So we are seeking for EUR 10 million to EUR 50 million the efficiency and scalability in terms of our fixed costs. We already currently have the low level of fixed cost in comparison to the peers. So 11.5% is the starting point for us. But as we have defined, our target is that it will be below 10% by end of 2025. And here are the key components that we see in the essence of making this possible for us. We have been talking about the logistics already. So these investments related to Jätkäsaari, the warehouse operations, giving us the flexibility to increase assortment in the Jätkäsaari, but at the same time, be able to ship larger quantity of products with less resources needed for that one. Jyrki already mentioned about the supply chain and product management. So there are quite a few areas what we have ended -- identified and already are developing in order to secure that we have the scalability in these operations that we do. In the longer term, we target that quite a lot of areas of the manual work will be minimized, and that will give us a possibility then to grow the business without adding too much overhead cost related to that. Inside the company, also, if you look at the processes, how we operate and work as a company, there are identified areas where we believe that we are able to [ automize ] and utilize then the best practices so that we don't, with the increased volumes, need to add the headcount or overhead costs related to those ones. And also, as Jyrki mentioned about the marketing. So we have been building up the capabilities for identifying our customers, optimizing them to the messages that we communicate our customers. And we believe that with these ongoing initiatives and planned initiatives, we are also able to scale our marketing towards EUR 1 billion. Then what is important, of course, is to understand that as a company, as we want to grow, there are, of course, focus areas in terms of the investments where the company will be focusing during the strategy period. And we have more or listed the main areas. So as announced, logistics and [ automization ] in that area will be in the focus as going forward as well. Supply chain and category management, we have identified as a key area where we'll be investing. And overall, kind the technology backbone, which Jyrki just went through, are the key areas where our the investments will be directed. What is good to remember is that in terms of the size of the investment, I think still looking to history, we don't expect in these areas that the investments level differ considerably versus what we have been earlier investing. Panu mentioned about M&A. Something interesting. Of course, time will show what possibilities we will have and what is then the potential the CapExes that are related to that. But having still the growth strategy as we have, planning to investment, our development, having the strong cash position, as said, we are also keeping the promise that we will continue to pay the growing dividends to our shareholders. Then some words about the sustainability and the work that we have been doing. And as was mentioned already earlier, this is the constant work. It's something that it is in the company's DNA from the day 1. And only summing up couple of these main activities that we have had during this year already, and then shortly about the plans that we have as going forward. Just to put these things to certain perspective. We conducted 1 year back -- 1 year ago, a quite extensive survey. We got more than 2,000 responses. And based on that one, we have set the focus areas for our sustainability, ESG work according to these 4 focus areas. As Panu said, it's about the customers on their -- customers' service and on their side is something that is important for us. We have been constantly working with the environmental topics over the years, which is also visible in the following slide. And as our own personnel -- passionate personnel is the key to success. We have been constantly working on developing our staff and continue to do so as going forward. And of course, the transparency in terms of how the company is taking care of the governance and the ESG topics is something that we have been working constantly and will be something that we will be then also disclosing in near future, some of the key targets from that side as well. Again, a quite busy slide. No need to go too much into details, but this is the first time that we are actually disclosing our greenhouse gas emissions in Scope 1 and 2. So here, you see a bit of a history, how it has been developing and our estimates. So basically, we have very limited or nonexisting Scope 1 emissions. In terms of the Scope 2, we have been constantly working to reduce those ones. I think as a one small item as such is that we have utilizing the solar energy in [ older ] [indiscernible] the stores, which is something that it brings up to 20% of solar energy in our operations in those locations. And as a company, we have a the small physical footprint, which is then also drives for the emissions all in all. I'm quite proud of saying that in terms of the overall CO2 emissions versus the turnover, we are on this level of 0.87 tonnes per million euros, which I think is a something that none -- not many companies can have. As a one thing, just to highlighting then that we will be now publishing -- we have been working for also the topic related to the -- our internal targets with these ones, and we will be then disclosing those in near future as well. I think in terms of the ownership structure, I think this is something that is, of course, public information. I think I only mentioned that since we moved the main list of NASDAQ, since that time, our owner structure has changed somewhat. So we had less than 9,000 shareholders prior to that one. And now we have already more than 17,000. So that's something to be noted here. So just as a final thing, key takeaways. So we have clearly our plans ready for achieving that EUR 1.50 billion target. So we will be driving the profitability with a favorable revenue mix. We have plans and equipped for well scalable business model. We will continue focus on the cost structure, and we will also make sure that there is attractive shareholder distribution policy in place as going forward. Thank you.

Good. So now we have time for your questions, and we will be giving answers then. And thank you for the questions. We have a quite amount of those. And still, you have some time to send those over. So they come directly to me, and I will now address those to our presenters. So first one. Given the fast online shift, are you expecting declining store sales during the strategic period? How you view the current store footprint when online is expecting to take considerably higher share of sales?

Yes. Yes. I think based on this one which we briefly went through, we don't believe that the store sales would be declining. We foresee that the omnichannel experience is the key for our customers as going forward. And from our perspective, we don't mind if the customers are of visiting our stores, of getting the experience and then go back home and open their laptop and do the purchases online. So as such, we don't believe that the store sales will be declining, only that the online will be picking up.

The next one might be to Vesa, to you, regarding our SKU levels during the year. Do you have a large seasonal variation? And how much SKUs you have in imminent delivery?

So seasonality, of course, we have a lot of different products. And we have, in my opinion, found the right products for the right seasons generally or assortment. And amount of SKUs is increasing, and it will keep on increasing when we go into new products. So -- and then if you think about the assortment and how many products we have -- how many products we are able to deliver immediately, it's majority of the assortments.

Next one, regarding B2B market and competitors. That may be to Panu. Who are the main competitors within B2B market? And what position you have in the market? And then a follow-up. Is there difference between B2B and B2C margins?

Okay. So many questions combined. I think the competition somewhat varies on the sectors. So small and midsize, it's the same as we have on the consumer business. And then if we go to enterprise or public tenders, then there are huge international distributors. So it varies on what's the business or what's the segment we are operating. The margin also differs in these different sectors. So small and midsized businesses is very close to the basic business that we are running. And if you go then to enterprise or public tenders, then the margins are normally slightly below the average margins that we have at the moment. I think we have a good standing in the small and midsized businesses. We don't actually know the market position, are we number 1, 2 or 3, but we have a solid market position. In public tenders, obviously, we are a small player. We want to be also present in that segment. And I think in enterprises, we have also some room to gain.

Then regarding investments and our delivery performance. So you aim to improve delivery performance. Could you open up possible investment needs within mega stores?

Well I mean we have typically opened up bigger stores than maybe in average because we have a large assortment. We want to display it. We want to create excitement and draw people also into the stores, just to look around, get new ideas, get the touch and feel of newest releases. So we have been always running slightly bigger stores than maybe the typical local consumer electronic retailers have. And if you look at the Jätkäsaari flagship store, which is a huge building, one of the biggest consumer electronic stores, maybe in the world. So our approach has always been slightly different. So less stores, but if there is a store, it should be big, it should be excitement. It should be like experience center. And to support those big stores, we have already big store warehouses that support and fulfill that -- the shelves. So utilizing that space maybe in somewhat of small automation or delivery could be an option to distribute to the new intensity of the stores, a certain part of our assortment, which would then need some investment. But if you look at the total investment that we are conducting in Jätkäsaari, the logistic warehouses as such, it's EUR 4 million. And it is a huge automation. So you can maybe, from that figure, get the idea, what's the size or what would it be if it would take those stores a step further and utilize them as distribution centers as well.

Good. Now I can see there are a lot of interest in our B2B business and questions regarding that. So if you're expecting to grow in B2B segment, how it might affect on your margins?

Yes. Well, I think I slightly answered that as well. So the major part of the growth will come from small and midsized businesses, and I think their convenience, speed, availability, easiness of shopping is -- are the most value drivers in making decisions. And in those cases, sometimes the availability is more important than the price. So if you have a need for your staff in a small company to source new computers, laptops, phones, for example, you don't have the time to wait for Black Friday and the best offers. So I think it's quite close to the customer and the B2C business from the margin perspective. And then in enterprises, it could be slightly lower than in public tenders than -- it's slightly lower than in normal business.

Good. As we stated that we aim to double our B2B business, so does that require some investment, for example, sales teams growth, et cetera?

We have actually done those, needed at this point. Obviously, as we grow, and we have the aim and target to attract new customers also in the midsize or larger company sectors. We need some additional know-how and skills to the team. But the major part of the investment is probably already done.

Good. Next one, interesting. Do you have plans to expand to international markets?

No actual plans at the moment. We would probably gone out with that news here if that would be the case. I tried to tap into that area in my presentation when I talked about M&A. What we are seeking for as possible acquirees are companies with a foothold in Finland, in the Finnish market. On the other side, meaning that it would be a point of interest for us to have international business or sales. But the company or the people or the culture should be close to the Finnish market because we understand that, and that would make it easier to integrate. But that could be an opportunity to go into new markets through M&A. Going international with the line of business, with the same brand, same approach that we have in Finland, highly unlikely because that greenfield operation would take a lot of time, a lot of money.

Maybe as addition, as I mentioned in my presentation, we have a EUR 11 billion addressable market here in Finland. And we feel that a lot of the market is saturated and fragmented, and we believe there is consolidation happening. So I feel the same. We have a lot to do here in Finland.

Very good. Next one, we have a question about the private labels and share of sale of those. So how much is share of sales in -- of private labels? And then the follow-up regarding the margins, how much higher gross margins there -- those private labels have?

Well, in my presentation, it said that we have over 3,000 SKUs of private label items. So that's about 4% of the total assortment. Unfortunately, I can't disclose margins closely, but it's significantly higher than the A brands.

Good. Maybe, Mikko, if you take this one regarding the value-added services that you mentioned in your presentation. Can you open up those services that you offer? How much this contribute to sales? And have you identified new possibilities within those services?

Yes, I think if I start, so looking at this in respect of the financial services. So it's clearly something that we have been doing already in the past. As I said that we are now introducing new credit account limit product as well for our customers. So we believe that in the finance service sector, there is a -- plenty of still room for increasing as going forward. In terms of other areas, I think I already discussed that in the presentation that we believe that we have in connection to the products, we can also offer added value services, and that's something that we are -- have been looking into.

Maybe then again to Vesa. What will the most interesting product categories to grow Verkkokauppa's private label business?

Well, we have private label products in almost all of our product categories, and we are expanding it very fast. So we are basically trying all the opportunities that are available. And I think especially the evolving categories has a lot of private label potential that has not yet been taken into action. So those evolving categories, we see the most potential in.

Then this is regarding the data use. Maybe Jyrki can start it. I would assume that a large part of your active customers are using both online and stores. Given the lack of loyalty program, is there possibilities to combine online and store sales data?

So there's been some respect, already do that, that we combine -- but of course, if the customer is not registered as a customer and comes to our store, of course, we won't recognize as a unique customer versus that would happen in e-commerce. So yes, in some ways, yes, absolutely, if the customer is using or registering also when they're physically on-site, then we can do that. But...

All right. Yes?

Maybe additional. Most of our clients are registered because they, at some point, have purchased online. And those ones typically utilize the account to have the purchase included in there, the warranties and the receipts as well. So from that perspective, we -- obviously, it's not a combination. I mean it's one set of data. But if a customer wants to go to just shop, take it from the shelf, pay it on -- at the cashier and not have registered and have the information, then obviously, we don't get that data.

In case system-wise, they are in the same system, which is -- again, gives us that edge if they come to us, both physically or in e-commerce, that we know the customer and what they've purchased.

Good. And then follow-up to this, maybe to Panu that, do we have a plan for a loyalty program?

Well, I think we have had many plans. Sometimes it's also good not to exercise the plan if we don't see that that's necessary. Like Jyrki said a couple of times, I think we have more data than we can utilize at the moment. So we would really need to identify the problem that we are fixing or the solution that we want to provide to our customers. What is the added value in registering into a loyalty program because those loyalty seem to be quite close to each other. And for a customer, it's not easy to understand. So what will I gain out of it? So we look into it constantly, but we don't -- we haven't identified the need or the problem that we need to solve. So -- but we keep on looking.

Well, this one maybe to Mikko regarding these new currencies, bitcoins and other cryptocurrencies. So do we have any plans to add those in our payment methods?

Yes. Of course, I think if I just purely look at the volatility of those currencies, how they are trading in the market, I doubt that those are the ones that we will be focusing. So I firmly believe that we will try to find, let's say, a bit more normal new payment methods for our customers in first place. So -- but let's come back to bitcoin a bit later if that is then something that will dominate paying in the longer future.

Good. Then there is one rather technical question. Maybe I can take this one. So whether the B2B business is included in online sales? So yes, B2B done in online is included in online sales and done off-line is included in off-line sales. Then there is quite expected question regarding Amazon in this market. So maybe Panu, you can take this. Given Amazon are moving forward in Sweden, latest with launch of prime delivery services. Could you comment on how you see the potential of them moving also in the Finnish market? To what extent would this be a risk for us and how will we mitigate this?

Yes. Well, about -- starting with the moving. I think it was displayed in one of my slides that Finnish consumers, yes, they already buy from global players. They have been conducting or doing that for several years from Wish, from Alibaba, from Amazon, for example. And Zalando is one of the most utilized site in Finland nowadays in e-commerce. So I think that will continue like that. So e-commerce market is global. It has always been global, and it's get more -- it gets more and more global. So it's important for our operators to identify where are the key competitive advantages that they have in their own market and how we went through our materials and how we have been benchmarking the business, the core of the business, and where we set ourselves apart from the competitors. I think that the same play or same answers go also to global players. Speed and flexibility, probably one of the most important part, being the fastest in the market with warehouses locally and utilizing the stores is something that is it's quite hard to get to the same level as a global player without any physical touch point or presence in the market. Four stores -- mega stores, experience centers, they seem to be quite much value-adding to consumers. Consumers like to go to stores and shop around, look at products, return products or get them serviced, for example. So that's also a part that sets us from global players without the physical presence. I think brand perception, sustainability, the local presence could be of value to some customers. So we have identified several areas where we can compete, whether the competition comes from Finnish market or otherwise.

Now I just noticed that we are well over time already, there are still a lot of good questions. We, unfortunately, can't maybe take all of those. Maybe just a couple of quick questions. Maybe this one to Mikko. Have you been able to increase the performance of the cost structure already this year? So after announcing these efficiency targets in our strategy earlier this year. And will this have an impact on the figures already 2021?

Yes. I think this year, still this goes with the building up the enablers for us then to have the scalability. So I would say that not significant impact still for this year, mainly the investments that we are focusing now.

Maybe adding on that. In interim reports, we disclosed some costs or cost levels. And normally, margin and marketing spend, for example, are ways to drive the business. And we've been driving the business and driving the sales without additionally spending marketing money, for example. So the marketing performance, return on marketing investments, analytics around that area is already shown. But obviously, sometimes, we need to reinvest that to make sure that we gain market share. But the biggest part in the logistics or category management, supply chain will be then shown next year.

And maybe one to Vesa. You already answered one question regarding the component shortage, but then there is additional question about the possible increase in cargo prices. Do you have any comment on that?

Yes, that's been happening for months. It started in the beginning of the pandemic, and the containers are still high up on price. And it doesn't seem like there's going to be any changes in the coming months. Hopefully, next year, situation will normalize. And for many big items, if the container is up to $15,000 or $20,000 per container, it will increase the price of the products. But let's see how it affects the pricings and at what time.

Thank you. Now I think it's time to conclude the event. Before the closing words and summary from Panu, I would like to thank you all for your participation and activity and all the questions. Also, I would like to thank our presenters, Panu, Vesa, Jyrki and Mikko. I hope you have got more insight on our strategy and our businesses. And then just the practical issue that note that recordings of all the presentations will be available on our investor site after this event. But now I will give -- turn to Panu, and he will sum up this afternoon. Thank you. Over to you, Panu.

Thank you, Marja. Thank you, team. Thank you, dear audience, for spending the afternoon with us. We are quite excited about the strategy. We are eager on driving the business and executing according our strategic plans. Hopefully, you get some -- you got some new insight into some of the growth areas and also into the technology. So at this point, we would like to thank you. And maybe in a nutshell, I think we have a great strategy, a winning team. We will execute accordingly, and that will probably open up interesting investment opportunities in the capital market. Thank you. And hopefully, we can see you soon.