Aug 11, 2021
Poshmark has issues with Apple's ad tracking changes, expands to India
Aug 11, 2021
Second-hand retailer Poshmark Inc has forecast third-quarter revenue largely below estimates and warned that its marketing efforts were taking a hit from Apple Inc's new privacy controls over digital advertising tracking.
Poshmark's shares slipped 7% in after hours trading, poised to settle more than 25% below its initial public offering price in January.
Apple in April enforced a rule requiring developers to seek permission for gathering data that can be used to track users across other sites and apps. Facebook Inc had criticized the policy, saying it could harm customers.
Poshmark, which relies on social media marketing to draw in shoppers, felt the impact of Apple's new policy late in the second quarter and expects it to continue into the current quarter as well, Chief Executive Officer Manish Chandra told Reuters in a call.
The company forecast third-quarter revenue of $81 million to $83 million, with the mid-point slightly below estimates of $82.4 million.
But Chandra was confident the effects of Apple's policy were only temporary, as Poshmark has been spending heavily on alternatives such as TV ads and tie-ups with celebrities like Marie Kondo.
"It will work itself out as we go through the quarter and the second half, largely because our channels are quite diversified and super adaptable," Chandra said.
Poshmark said revenue rose 22% to $81.8 million in the second quarter, beating Refinitiv IBES estimates of $80.3 million, as it pulled in thrifty young buyers looking for more environmentally sustainable ways to shop for everything from pre-owned T-shirts to high-end boutique dresses.
The Delta variant of the coronavirus was not a major concern for Poshmark in its revenue outlook, Chandra said.
Smaller rival ThredUp Inc's shares rose over 7% on Tuesday after its second-quarter revenue surpassed estimates. It also forecast third-quarter revenue above expectations.
Earlier this month, Poshmark announced plans to bring its shopping experience to India, the second most populous country and one of the fastest-growing e-commerce markets in the world.
By the end of this quarter, consumers in India “will be able to join Poshmark's thriving community of millions of users in the U.S., Canada and Australia to make money, save money, find human connection, and fuel entrepreneurship”.
It said the Indian market has over 622 million active internet users and “a rapidly growing base of sustainability- and value-conscious consumers, particularly Gen Z and Millennials”.
The introduction of Poshmark “will present an attractive offering to this diverse community of shoppers and sellers”.
Manish Chandra added: “Having roots deeply embedded in India, I am delighted to be bringing Poshmark to my home country. India is an ideal fit for our unique social commerce model, both from a cultural and business perspective.”
It also announced two new leaders to support its global expansion. Sylvie De Wever joined as Poshmark's first Vice President and General Manager of International, and Anuradha Balasubramanian is General Manager of Poshmark India.
Additional reporting by Sandra Halliday
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