Redbubble’s growth tear helps it double revenue in a year

“If we become a better ecommerce retailer, as well as a unique make-on-demand marketplace, it opens up a huge total addressable market for us,” Mr Ilczynski told The Australian Financial Review.

“Yes, we’re this wonderfully niche player. But, how do we become a genuine player in these really big revenue pools? We have to take the next leap in competing against more traditional retailers.”

Redbubble lets independent artists make money from their designs by selling them through its marketplace on everything from T-shirts to stickers to homewares.

To compete for a bigger slice of the retail pie, Mr Ilczynski believes Redbubble has to improve the quality of the goods it sells so that not only are the designs impressive, but so too is the quality of the materials.

“Some of our products already really demonstrate that, like wall art. But there’s plenty of people who have bought our products and given us feedback saying ‘these are terrific quality, but this one has room for improvement’.”

Redbubble swung to a $41 million net profit in the six months ended December 31 from a $3 million loss in the year-earlier period, the company said in a statement to the stock exchange.

But despite the surge in earnings, Mr Ilczynski told investors not to expect a dividend yet.

“The strategic priority for the group now is to ensure we extend the market leadership we have established,” he said. “We intend to invest in both the artist and customer experiences, to improve loyalty and retention and to ensure long-term growth.”

This was the first time Mr Ilczynski delivered results with the company, after he was appointed chief executive last November, succeeding Redbubble founder Martin Hosking, who had stepped back into the role on an interim basis.

Angie Ellis of 8020 Investments is an investor in Redbubble and said the results were in line with her expectations.

“I like to invest in these unique scalable global businesses. It’s a platform where artists can upload their beautiful designs for anyone around the world to purchase products like aprons, backpacks & mini skirts featuring that intersting artwork,” she said.

“I have created a shop myself in Redbubble to create unique presents for friends to understand the platform. I have been very impressed with the quality and product tracking communication. I have uploaded my daughter’s artwork and printed notepads, jigsaw puzzles and clothing with her designs on them.”

The company’s massive 2020 is stretching into calendar year 2021, with Redbubble saying its January marketplace revenue rose 66 per cent from the year-earlier month, or 82 per cent on a constant currency basis.

The company outlined four key focus areas to keep driving growth – artist acquisition, activation and retention; user acquisition and transaction optimisation; customer understanding, loyalty and brand building and future physical product and fulfilment network expansion.

There are 572,000 artists active on Redbubble, to which the company paid out $65 million in the last six months.

Redbubble expanded its shopping customer base by 69 per cent to 6.2 million people in July-December, compared with the year-ago period, but 40.1 per cent of its sales are completed by repeat customers.

The UK, which has been in the midst of a vicious second wave of COVID-19 and is the third-biggest market for Redbubble, had the highest growth in gross transaction value for the first half at 105 per cent.

North America, which accounts for 69 per cent of Redbubble’s sales, also performed strongly with 89 per cent growth.