Wayfair suffers four consecutive quarters of losses! Both active users and order volume decline

Recently, Wayfair, an American home furnishing e-commerce platform , released its second quarter financial report. Data showed that Wayfair's net income for the quarter was US$3.284 billion, a year-on-year decrease of US$573 million, or 14.9%. Gross profit was US$896 million, accounting for 27.3% of total net income.

The report pointed out that the home improvement craze caused by the epidemic has subsided, and consumer preferences have changed dramatically. Wayfair fell into losses this quarter, with a net loss of US$378 million, turning from profit to loss compared with a profit of US$131 million in the same period last year.

In terms of regional revenue, Wayfair's net revenue in the United States was $2.8 billion, a year-on-year decrease of $302 million, or 9.7%. International net revenue was $500 million, a year-on-year decrease of $271 million, or 35.7%.

The financial report shows that as of June 30, 2022, Wayfair's active customers and order volume both declined. Specifically, there were 23.6 million active customers, a year-on-year decrease of 24.1%; the order volume dropped to 10 million, a year-on-year decrease of 28.2%, of which repeat customers placed 7.8 million orders, a year-on-year decrease of 25.7%. Repeat customers are the main source of revenue.

As one of the largest home furnishing e-commerce platforms in the United States, Wayfair has more than 23,000 suppliers and can provide more than 33 million products. Its consumers range from a wide range of households with annual income ranging from US$25,000 to US$250,000, including business professionals.

However, under the influence of the epidemic, Wayfair's performance in the past year has not been very ideal. From Wayfair's financial report data, we can see that including this quarter, Wayfair has been in the red for four consecutive quarters, and the amount of losses has gradually increased. In Q3 2021, the net loss was 78.02 million US dollars; in Q4 2021, the net loss was 202 million US dollars; in Q1 2022, the net loss was 319 million US dollars; and the net loss amount this quarter rose to 378 million US dollars; the cumulative loss in four quarters was about 980 million US dollars.

Wayfair's main market is in North America, but it has been developing its European business in the past few years. According to Wayfair, the overall furniture e-commerce market in Europe reached US$74 billion in 2021, which is also the main driving force for Wayfair to continue expanding its European business.

Wayfair has already opened sites in the UK, Germany and Ireland, and it is reported that the next site will be located in Austria. Wayfair said that Wayfair's popularity in the UK has grown to 77%, making it one of the preferred home furnishing websites for consumers; the Irish site was launched in June this year, providing Irish consumers with more than 1 million home appliances and home furnishings such as lighting equipment, soft furnishings, kitchenware, storage devices, outdoor devices and decorations from more than 4,000 suppliers.

It is reported that since its IPO in 2014, Wayfair has achieved an average annual compound growth rate of 48%, gradually becoming one of the largest home furnishing e-commerce platforms in the United States and even the world. In 2020, the total revenue reached a peak of US$14.145 billion (approximately RMB 90.9 billion). In 2021, the total revenue began to decline, and by 2022, the revenue continued to decline.

Faced with long-term losses, Wayfair stated that it would respond by reducing costs, improving execution efficiency, and suspending some expansion plans.

In fact, the global furniture e-commerce market is still on the rise. According to data released by the General Administration of Customs, China's cumulative exports of furniture and parts in 2021 were 477.19 billion yuan, a year-on-year increase of 18.2%. In addition, a report released by MarketandResearch.biz shows that the revenue of the global furniture e-commerce market will grow at a compound annual growth rate of 13.1% in the next five years, and the global market size will reach 116.33 billion US dollars by 2026.

Wayfair

Active Users

North America