Saudi Arabia's Nice One Beauty: IPO Plans Unveiled, Set to Shake Up the Tadawul
Nice One Beauty Digital Marketing Company, a prominent player in Saudi Arabia's e-commerce landscape, has made a significant announcement: it's going public. The company, which has rapidly grown to become the largest online platform for beauty and personal care products in the Kingdom, plans an initial public offering (IPO) on the Saudi Exchange (Tadawul). This move signals not only the company's ambition but also the growing confidence in Saudi Arabia's burgeoning e-commerce sector.
Nice One Beauty's Journey to the IPO
Founded in 2017, Nice One has witnessed phenomenal growth, transforming from a startup to a leading e-commerce platform within a short span. Offering more than 28,000 products from over 1,200 international and local brands, along with its own exclusive lines, Nice One caters to millions of customers across Saudi Arabia. Their success isn't just about offering a wide selection; it's also about the user experience. The Nice One app, their primary sales channel, accounts for 95 percent of sales and boasts over eight million downloads, maintaining a 4.6-star rating on both app stores. This impressive app-centric approach has driven significant growth, reaching SAR 782.4 million in revenue for FY 2023 and a substantial 61.2 percent year-on-year revenue increase in Q1 2024, reaching SAR 250.1 million. This growth is not just about top-line revenue; the company also demonstrated remarkable profitability and efficiency. Their EBITDA margin improved significantly, rising from 4.5 percent in FY 2021 to 10.2 percent in Q1 2024, showcasing the company’s strong cost efficiency and scalability.
Key Figures and Financial Performance
- FY2023 Revenue: SAR 782.4 million
- Q1 2024 Revenue: SAR 250.1 million (61.2% YoY growth)
- FY2023 Net Income: SAR 32.6 million
- Q1 2024 Net Income: SAR 21.9 million (146.6% YoY growth)
- EBITDA Margin (Q1 2024): 10.2%
This impressive financial performance underpins Nice One's confidence in pursuing an IPO. The success of the IPO will also reflect the growing strength of Saudi Arabia's e-commerce market and the potential for future growth in this sector.
Details of the Nice One Beauty IPO
A total of 34.6 million shares (around 25.24 percent of the company's stake) will be offered. This offering comprises 29.1 million existing shares and 5.5 million newly issued shares, representing 30 percent of the company's post-IPO share capital. The IPO follows the approval by the Saudi Capital Market Authority (CMA) on September 25, 2024. The net proceeds will be allocated to selling shareholders on a pro-rata basis, with the remainder used to fuel the company's growth, including enhancing working capital, developing and marketing its own brands, bolstering logistical and technological capabilities, and pursuing overall business objectives. The IPO's final price will be determined after the book-building process. Following completion of the offering and relevant regulatory approvals, the shares will be listed on the Tadawul's main market.
Allocation of Shares
- A maximum of 34,650,000 ordinary shares, representing 100% of the offer shares, will be allocated to the Participating Parties initially, with the final allocation determined after the end of the retail subscription period.
- In the event of sufficient demand from retail investors, they will be allocated a maximum of 3,465,000 Ordinary Shares representing 10% of the offer shares.
The Future of Nice One Beauty
The company’s leadership expresses enthusiasm about the IPO and the future. Omar Al Olayan, CEO and co-founder, stated that this IPO “marks a significant milestone in Nice One’s journey.” He highlighted the company's transformation from a startup to the largest e-commerce platform for beauty and personal care in Saudi Arabia. Abdularahman Al Olayan, CMO and co-founder, echoed these sentiments, emphasizing the commitment to growth, digital transformation, and alignment with Saudi Arabia's Vision 2030. The IPO will undoubtedly provide additional capital for further expansion and the realization of long-term strategic goals. The company’s robust logistics infrastructure, including its main warehouse in Riyadh and company-owned transportation fleet, ensures seamless delivery across the kingdom. In addition, the company’s advanced IT infrastructure is hosted on Amazon Web Services (AWS), ensuring high platform reliability and operational efficiency. Nice One's future looks bright, driven by a strong brand, technological advancements, and the ever-expanding Saudi Arabian e-commerce market.
A New Chapter in Saudi E-commerce
Nice One Beauty's IPO is more than just a corporate event; it represents a significant step forward for Saudi Arabia's e-commerce sector. The company's success story, coupled with the government's support for digital transformation, underscores the potential for substantial growth and innovation within the Kingdom's online marketplace. This IPO could inspire other Saudi Arabian businesses to explore similar paths, fostering greater economic diversification and attracting further foreign investment. It is a testament to the nation’s commitment to Vision 2030. This landmark event promises exciting developments for both the company and the wider Saudi Arabian economy, and with the support of financial institutions such as EFG Hermes KSA and SNB Capital Company, it is poised to be a major success. Investors eagerly anticipate the book-building process and the official listing on the Tadawul.
