The acceleration of online retail sales during the pandemic has brought a race to market as ecommerce players rush to pull off IPOs.

The moment looks opportune for etail flotations in the wake of a step-change in online adoption.

Cooped-up consumers have often had little option other than to purchase online, or have chosen to buy from their sofas rather than risk busy bricks-and-mortar shops and retail locations.

And as sales have risen, so have valuations. Health and beauty giant The Hut Group, which floated in the autumn, now has a market cap of £7.7bn. That compares to Marks & Spencer’s £2.6bn valuation or Sainsbury’s at £5.3bn.

Ocado is now worth £18.5bn; Asos £5.3bn. Boohoo is worth £4.6bn, having climbed pretty steadily since October despite being embroiled in controversy over its ethical standards.

This week, footwear brand and retailer Dr Martens announced its intention to float, emphasising its direct-to-consumer and ecommerce credentials. 

Waiting in the wings are online greetings card specialist Moonpig – it formally announced plans today, with a valuation of £1bn mooted – and Music Magpie, reportedly the “biggest global third-party seller in the history of Amazon Marketplace”.

“The new arrivals bring new business models reflective of the changing retail and consumer world, and often take a global rather than local view”

The IPO surge is not confined to the UK. On the other side of the pond, Germany-based fashion etailer Mytheresa aims to list on the New York Stock Exchange, while fashion marketplace Poshmark is heading to Nasdaq.

The new arrivals bring new business models reflective of the changing retail and consumer world, and often take a global rather than local view.

Music Magpie, for instance, is representative of ‘recommerce’ – a mix of what used to be called second-hand, everything from phones to books, with a ‘circular economy’ recycling slant.

Poshmark describes itself as a “vibrant community powered by millions of sellers who not only sell their personal style but also curate looks for their shoppers”. 

Its “social marketplace” approach includes aspects typical of social media, such as likes and comments – according to Poshmark, there were 56 million such engagements throughout the course of 2019. It is in some ways akin to some of the Chinese etail giants, which have blurred former online boundaries between social and commerce.

Different ways of doing things open up the potential of overseas markets where consumers now share many global traits.

Asos and Boohoo have long built international operations and that is also at the heart of The Hut’s strategy. Its ambition is “to be the global digital partner of choice across the beauty industry, powering channel shift from offline to online”. 

New companies and new ways of doing business are representative of retail’s ability to constantly reinvent itself. While the demise of famous names such as Debenhams and Topshop is sad, they were once disruptors. As old names go the way of all flesh, a new generation of businesses is emerging and that’s worth celebrating.

“This is the ideal moment for online players to seek listings and that brings the danger of a general bubble and individual disappointments”

But are all the new names worth investing in? Just like their predecessors, some will fly and some will falter. 

This is the ideal moment for online players to seek listings and that brings the danger of a general bubble and individual disappointments.

When online marketplace Wish.com floated last month, for instance, its shares fell by more than 16% from the pricing level. It has risen this year but remains lacklustre.

In its IPO announcement, Dr Martens said that its management and employees “consider themselves custodians of the Dr Martens brand”.

That’s probably a good lens through which to look at any of the current wave of potential IPOs. To what extent does a flotation look like custodianship or cashing in?

What benefits has that custodianship produced in the time up to the change of ownership? And what checks, balances and governance are in place to ensure good custodianship in the future?

There will be chaff as well as wheat in the crop. But the best will point the way to reinvigorated retail.

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Accelerating Ecommerce Week

Want to understand how to redefine your online strategy this year?  

Running from February 8 to 12, 2021, RWRC is bringing you insights and opinions from top retail leaders and experts across a series of free in-depth articles, the new Ecommerce 2021 report and two days of free virtual events to help you attract and retain shoppers in the crowded online market.